What Happens To Life Insurance During Divorce?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    The court decides what happens to life insurance during divorce, or you can work it out with the spouse from whom you are being divorced. If the need for the life insurance policy still exists, you may need to change the beneficiary of the policy. If the owner of the policy is no longer appropriate, you may also need to agree to change the owner. E.g. The policy was purchased to pay off the house, the owner of the policy is the husband, but the house is going to the (soon to be ex) wife.
    Answered on June 28, 2013
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  2. 0 POINTS
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    David RacichPRO
    Fountain Hills, Arizona
    If there is no divorce decree reassigning policy benefices, owners or insureds, then nothing changes. But it should if financial liabilities or future obligations have changed. Cash Value life insurance is personal property and should be included in the list of assets for divorce dissemination. Child custody may dictate the policy re-titled areas of policy owner, beneficiaries and maybe even the insured.   
     
    Answered on June 28, 2013
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  3. 1492 POINTS
    Jeff Davis
    Insurance Advisor, Lordship Insurance Services, California
    It will depend on how the divorce is structured. As an Insurance Agent and not an attorney I won't attempt to tell you what the laws says regarding divorce. What I will offer is some suggestions as to what could happen;

    1) Nothing - present insurance in force prior to a divorce does not change because of the divorce

    2) Judge assigns insurance policy - a judge could order that the beneficiary for the policy be changed to support a divorcing spouse or children. He could also issue instructions as to how the cash value of a policy is to be distributed.

    I would consult an attorney for a more detailed answer.
    Answered on June 29, 2013
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  4. 10968 POINTS
    Tim Wilhoit
    Owner, Your Friend 4 Life, Brentwood TN
    One of two things happens with in force life insurance policies during a divorce. The judge can order amounts and beneficiaries to cover alimony, marital debt or child support payments in case of the early death of one or both spouses.

    The second things that if the court makes no ruling is nothing. You may keep your plan, cancel your plan or change your plan. The one thing most divorcees need to consider is to change the beneficiary. I have personally worked on a nightmare case where an ex-spouse was left as beneficiary and the new spouse received nothing after the death. Not something you want to forget about, especially when it is too late.
    Answered on March 24, 2016
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