Divorce And Life Insurance:  Understanding Your Rights

The following information and answers regarding divorce and life insurance policies can help you identify and understand some of the issues that need to be considered during divorce negotiations. 

by WomansDivorce | Answers by Brette Sember, J.D.

In many divorces that include provisions for alimony or child support, it is common practice to include a stipulation that the supporting spouse should carry a life insurance policy. This is meant to ensure that those support payments continue even if the supporting spouse dies before fulfilling their obligations.

Additionally, if the dependent children or former spouse receiving alimony are named as beneficiaries, they have what is called an insurable interest in the supporting spouse's life. An insurable interest is the financial stake that someone has in the life of another person.

An ex-spouse generally isn’t allowed to remain on the other spouse’s life insurance policy unless they have an insurable interest or if the divorce decree requires it. Also, some state laws prohibit ex-spouses from receiving life insurance benefits if they don't have an insurable interest. It’s best to consult with a life insurance professional to understand your rights if you’re facing this situation.

How long the policy is maintained depends on what the policy was intended for. If it was meant as security for child support, it can be terminated when the dependent children reach the age of majority. Life insurance policies can also be maintained for longer periods of time if the parent so chooses. If life insurance is required to guarantee alimony, it may continue for as long as the alimony payments are required.

When negotiating your divorce settlement, it is important to designate who will be the owner of the life insurance policy. This is a key factor because the owner controls the policy and has the right to name the beneficiaries. One way to insure that the policy is maintained as stipulated in the divorce settlement is to name the custodial parent as the owner of the policy.

You can also include a provision in your divorce agreement stating if the beneficiary designation is changed or if the policy is allowed to lapse, you or your children would be entitled to portion of your ex-husband's estate equal in value to the death benefit.

Divorce and Life Insurance FAQs

The following questions and answers highlight some of the other issues that come up concerning divorce and life insurance policies.

Life Insurance as Required by Divorce

Beneficiary Designation

Maintaining Life Insurance after Divorce

Beneficiary Rights and Insurance Proceeds after Death

Can the courts require me to have life insurance?

Tiffany Asks: I'm in the middle of the divorce process and my husband wants me to take a life insurance policy because he has one. Can the courts make me have life insurance coverage?

Brette's Answer: You can be ordered to take out a life insurance policy as part of child support or alimony. Talk to your lawyer for details about the law in your state.

Can my husband be required to maintain life insurance for my son?

Tess' Question: My husband says he wants a divorce, and I discovered that he wrote the life insurance agency requesting a change of beneficiary. We have a 12 year old son who is not listed as a beneficiary. What can I do to protect my interest for the life insurance for my son's benefit in case something happens to my estranged husband.

Brette's Answer: As part of the child support aspect of your case, the court can order your husband to provide life insurance in a certain amount with your son as beneficiary. It is also possible sometimes for a person to have to buy life insurance naming the ex-spouse as beneficiary as part of the alimony or spousal support part of the case.

Can I request he keep me as beneficiary on his life insurance after divorce?

Barb's Question: After 38 years of marriage, we are now going through a divorce. He doesn't want to agree to keep paying the life insurance. He's 61 and the alimony payments would end if he dies. Do I have any legal rights to request that he has to keep the policy intact and name me as the beneficiary?

Brette's Answer: This is definitely something you should push hard for. I am sure there are legal precedents in your jurisdiction for this given the length of your marriage. It's a common thing.

Can my divorce be modified to include a life insurance provision?

Mary' Question: I have been divorced for 5 years now and was just informed that a non-custodial parent can be asked to carry a life insurance policy for his children. Can I ask the court to include a life insurance clause now?

Brette Answers: If your decree doesn't order this, you would have to go back and ask for a modification and show some reason why things have changed to make this necessary.

Do I have to pay the premiums on his life insurance policy?

Ann's Question: Our divorce decree states that "the husband will carry life insurance on his life in the minimum amount of xx with me as beneficiary. But he says it doesn't stipulate that he's required to pay for it and that since I am benefiting from his death (his words), I should be paying this premium. What do you say?

Brette's Answer: He's wrong. It is standard practice for a court to order a person paying alimony to maintain life insurance naming the alimony recipient as beneficiary. It's essentially another form of alimony.

Is the life insurance obligation dischargeable if he declares bankruptcy?

Judy's Question: We were divorced 13 years ago and the final divorce specified he must maintain life insurance for me (should he pre-decease me) for his total alimony obligations -- which is listed as until I die; or remarry). He declared Chapter 7 bankruptcy over a year ago. Through my extensive research I discovered that alimony payments are NOT dischargeable. My critical question: Is the life insurance obligation NOT dischargeable as well? If you can really help me, I want to thank you SOOO much in advance!

Brette Answers: It's advisable to consult with an attorney, but if the life insurance is designated as alimony then it is not dischargeable. You need someone to review the language against the bankruptcy regulations.

Can he change the beneficiary if the divorce decree states otherwise?

Cathy's Question: In my divorce settlement, it stipulates that I am to remain the beneficiary on my ex-husbands life insurance policy. My ex-husband is a life insurance agent and I recently found out that he changed the policy and took me off as the beneficiary. Is he allowed to do that and get by with it? In your experience, how negatively would a Judge view his actions being that he is the agent that wrote the policy?

Brette's Answer: You will need to either have your attorney contact his attorney, or go back to court since he is violating the order. It doesn't matter if he is the agent or not - he violated the order. A judge might be more annoyed with someone who works in the industry.

Can he drop me as the beneficiary if we are separated?

Lori Asks: We are separated and have not filed for divorce. He was renewing the annual insurance through his company and removed me as his beneficiary. Is he allowed to change the policy?

Brette's Answer: Yes, it is up to him. You can ask for him to reinstate you as part of your divorce settlement and when it is court ordered he must comply.

Why was he allowed to change the beneficiary during our separation?

Julia's Question: I was married for 21 years before I filed for divorce. We were separated (not legally) for not even 3 months when my husband died. I found out later he changed his life insurance over to his 82 year old mother. We paid the premiums every month out of our joint account. I have 3 kids to provide for. How can this happen?

Brette's Answer: He was the owner of the policy and could name the beneficiary. Unless you had a court order directing him to maintain insurance naming you or your children, it was his choice. Consult with your attorney about the situation.

Is it fraud if he changed beneficiaries because I was filing for divorce?

Kay's Question: I initiated divorce papers and my husband was aware of this. He changed the beneficiary on his life insurance policy 1 day before being served with divorce papers. He later died. Does changing the beneficiary knowing the divorce was initiated constitute fraud?

Brette's Answer: If there was no order directing him to name you or your children (if you have any) as beneficiary, it does not sound like fraud. Your attorney can help you understand what your state laws are.

Can he remove me as beneficiary after 23 years of marriage?

Lynn's Question: I filed a pro se packet for a divorce and mailed them to my husband who now lives in another state. Upon receiving the papers he called and said he was going to remove me from his life insurance policy from the union he retired from after 23 years of marriage. I think I should be the beneficiary of the life insurance. How can I make this happen?

Brette's Answer: You have no insurable interest after you are divorced, unless alimony is being paid. You should speak with an attorney about this.

Why is a divorce decree required to change the beneficiary?

Jill's Question: I've been divorced 8 years. The company I work for won't allow me to change the beneficiary without papers saying I'm divorced. We never went to court because we both agreed to the divorce and I have no papers proving I'm divorced. Why do I need to prove this? I thought I could change my beneficiaries whenever I wanted to.

Brette's Answer: This is governed by your subscriber agreement. If you aren't legally divorced you have not had a qualifying event allowing you to make a change.

Can I change the beneficiary if insurance wasn't in our divorce?

Sherry's Question: I recently got divorced, and my husband has a $750,000.00 life insurance policy on me. Is there some way to have this dropped? I heard that he can change the beneficiary. He also had one on himself naming me as the beneficiary. I don't think it's fair that he will benefit from my death! What advise could you give me?

Brette's Answer: You are the owner of the policy on your own life and you can change the beneficiary. Just call the company and ask for a beneficiary change form. He is the owner of the policy on his life and controls the beneficiary of that policy.

Am I still a beneficiary if life insurance wasn't addressed in the divorce?

Sue's Question: My husband signed ownership of a term life insurance policy over to me and we divorced a year later. Do I still have rights of ownership and beneficiary since this was NOT specifically noted on the divorce decree?

Brette: The problem is that in the eyes of the insurance company you may not have an insurable interest, unless there is alimony or child support that the life insurance is meant to back up.

Why can't I remain as a beneficiary on my ex's work-provided insurance?

Patrice's Question: My ex-spouse has a life insurance policy through his employer of which I am the beneficiary. He has been told by his that I cannot remain the beneficiary once our divorce is final because I'm not entitled to his employment related policy. Is this a true statement? He pays me alimony and I am a full time student.

Brette's Answer: Even if that is true (it may be a particular term of this policy), he can still take out another with you as beneficiary. It is very common to do this as part of the alimony plan.

He hasn't complied with the court order regarding life insurance.

Angela Asks: My divorce decree states that I can carry a life insurance policy on my former spouse. How do I get him to comply with signing a policy to make it effective? Can I obtain a life insurance policy on my former spouse based on the divorce decree without his signature?

Brette's Answer: Usually the decree requires him to actually pay for the policy, so he has to apply for it. If he doesn't, you file papers with the court for violation/enforcement.

What options do I have if he dropped the policy and is now ill?

Rochelle's Question: My divorce settlement included a $150,000 life insurance policy for our 3 children, with me as beneficiary and a $50,000 policy in my name to be carried by my ex-husband. When he lost his job, he dropped the policies. Now he has a terminal illness and cannot get insurance. What options do I have now?

Brette's Answer: Not much unless he has other assets. You can seek to enforce the judgment and could get other assets instead.

How is the life insurance policy affected if my ex starts a new family?

Kimberly's Question: It's only been six months since our divorce and my ex-husband's girlfriend is already pregnant. He is supposed to maintain life insurance until our children leave home. How would the life insurance be handled if he were to die over the next 12 years?

Brette's Answer: Life insurance is determined by the policy. Whoever the insured names as the beneficiary is who gets it. If the divorce decree stipulated he was to maintain life insurance with your children as beneficiaries, he is still required to do so even if he has other children. Those other children would not be entitled to the proceeds of any policy naming your children as beneficiaries.

Are insurance payments considered taxable income for the beneficiary?

Annie's Question: My husband pays for universal life insurance every year in the amount of $4300 and I am the beneficiary. Is that considered taxable income to me?

Brette's Answer: No, unless it is specifically designated as alimony.

Can my ex take out an insurance policy on our son?

Danielle's Question: I have been divorced from my ex-husband for 16 years and I just found out he recently purchased a life insurance policy on our 17 year old son. My ex now lives in Mexico. Neither my son nor I have had any contact with him since our divorce and I find this HIGHLY unusual. Can he legally do this?

Brette's Answer: A parent has an insurable interest in a child who is a minor. It is weird if he has had no contact for 16 years.

Why is the insurance refusing to pay if I am the beneficiary?

Mary Asks: We had a friendly divorce for personal reasons. We had no property settlement as we kept everything in both our names and each remained as beneficiary on life insurance policies. We also continued to live together. He recently died and the insurance company is saying I'm not entitled to his life insurance policy. Help!!!

Brette's Answer: If you're not legally married (because of the divorce) you don't have an insurable interest. You should talk to an attorney to find out if there is a way to prove you have an insurable interest another way (possibly your shared assets). Good luck.

If I was named as the beneficiary, can it be challenged when my ex dies?

Tina's Question: My ex-spouse has died and he left me as beneficiary of his life insurance policy. If I have an adult daughter, can she challenge my receipt of this policy? In other words, can she claim her right to it, versus the ex-spouse?

Brette's Answer: Life insurance goes to the named beneficiary. It has nothing to do with estate law. Whoever he picks gets it. (Note: this only applies if the divorce decree spelled out the beneficiary status or if you were re-designated the beneficiary after the divorce)

Will I still be recognized as the beneficiary if my Mom never divorced?

Julie's Question: My mom has passed away suddenly. We found a big insurance policy which she named me as the beneficiary. She took it out with a loan so it covers her for that and the rest to be paid out on her death. But I have found out she never got divorced even though they haven’t been together for over 15 years. Will the bank still have to pay out as I am the one named on policy?

Brette's Answer: Yes life insurance is paid to the named beneficiary.

Is a child entitled to the life insurance proceeds if a parent dies?

Cassandra's Question: My child's father remarried, but is now separated from his current wife. Would my child be entitled to any of the life insurance or value of the home if his father dies?

Brette's Answer: Life insurance passes outside the estate. The person named in the policy is who receives it. All other assets pass via the will if there is one, or by state intestacy laws (in which case your son would likely receive an inheritance if there are assets). The home, depending on how it was owned may not be part of the estate. Good luck.

Do we have beneficiary rights if our dad remarried and outlived our mom?

Laura's Question: Our parents divorced approximately 30 years ago. In the divorce decree my mother is named as having rights to 5 separate life insurance policies. My father remarried and stayed married to his second wife until his death eight years ago. My mother passed away six years before our Dad and never remarried. My siblings and I weren't mentioned in the will and my step mom never shared any details of my father's life. Do we, as their children, have any rights to a portion of his life insurance policies given our mother passed away before our father died?

Brette's Answer: No, it doesn't sound like it. Your mother was only entitled to the payments if she outlived him, which she didn't. So they wouldn't be part of her estate. This sounds like a painful and difficult situation. I hope maybe you can someday talk with your stepmother and get some information about your father's later years.

Will her ex get the life insurance proceeds if they divorced 7 years ago?

Leigh's Question: My sister-in-law passed away. Her beneficiary on her policy is her ex-husband, whom she divorced over 7 years ago. Does he still have a legal claim to the policy?

Brette's Answer: Generally no. Once a couple is divorced there is no insurable interest. There are exceptions so you need to discuss this with an attorney.

Do I have any rights to the proceeds from my step-dad's life insurance policy?

Amber's Question: When my mother's husband died, they were separated. She was looking into a divorce and had talked to an attorney however she did not follow through. Do I have a right to some of his life insurance? There was no will.

Brette's Answer: If they were not divorced, his estate will be divided according to state intestacy laws, which in most cases means it goes to the spouse and legal children. If he did not adopt you, you are not considered his child. Life insurance is distributed separately according to the terms of the policy. If your mother is listed, she will receive it. Good luck.

Is the life insurance beneficiary controlled by the will?

Dale's Question: My mom divorced my dad 13 years ago. She excluded him as beneficiary in her will, but he still received over $220,000 from her life insurance. She had the policy and paid the premiums. Shouldn't the beneficiary be her own adult child that she named as beneficiary in her will which included all assets?

Brette's Answer: Life insurance is not distributed via a will, but can only be changed by directly changing the beneficiary on the life insurance plan itself. If she did that, you need to find a copy of the change form she submitted or the confirmation of the change.

Who is liable if the insurance policy was borrowed against?

Question: My father was ordered during the divorce to maintain a $200,000 life insurance policy naming my mother as the sole beneficiary. My father recently died and it was discovered that the policy was borrowed on and the premiums went unpaid. Does the new wife have any liability?

Brette's Answer: The estate would be liable.

My ex died and never changed the beneficiary like the decree ordered.

Phyllis' Question: I got divorced over 20 years ago. The divorce decree states that our child is entitled to his father's life insurance. My ex just died last month and he did NOT name our son as the beneficiary to his life insurance. How does my son get what the divorce papers say he is entitled to. It was a $40,000 policy 20 years ago.

Brette's Answer: A claim has to be made against his estate. 

Is his estate responsible for my insurance policy if it was ordered in the decree?

MJ's Question: When I divorced, part of the legal agreement was that he would pay for a small life insurance policy for me, benefitting our children, for the rest of my life. He passed away a few years ago and his widow continued to pay the policy, which is in the name of the Estate. She now says she can't/won't make the policy payments anymore. Can she deny the estate payment of the policy? I'd just like a guideline answer if possible.

Brette's Answer: Financial obligations such as child support or life insurance policies end with death. Your ex's estate is not responsible to continue payments.

Are life insurance proceeds divisible in divorce?

Kristina's Question: Last year my husband's mother passed away, and we have just recently decided to get a divorce. I understand that I don't have rights to any of his inheritance (her 401K and the house), but do I have rights to a portion of the money paid out for her life insurance?

Brette's Answer: No, not unless you were named as a beneficiary.

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Copyright WomansDivorce.com | Updated March 29, 2023