Life Insurance Beneficiary Rules After Divorce
If you are going through a divorce, it’s important to consider how life insurance could affect the process. Let’s take a look at life insurance beneficiary rules after a divorce.
How Does Life Insurance Work After A Divorce?
What ultimately happens to a policy following a divorce will be directly influenced by the type of life insurance and the state’s laws. For example, if you are the policy holder on a term life insurance policy, it is likely to be considered a separate asset. At this time, the policy will remain in your possession.
However, if you have permanent life insurance, its cash value will represent marital assets that the ex-spouses must divide among each other.
Are There Any Beneficiary Rules Following A Divorce?
The divorce terms will address an existing life insurance policy. If you are required to pay alimony or childcare to your ex-spouse, the divorce decree may require you to keep your ex as a beneficiary.
Individuals may also be required to purchase a new policy that would pay an ex-spouse a certain amount in the event of death. Discussing the specific life insurance beneficiary rules with your lawyer is a crucial aspect of the divorce process.
Does A Divorce Decree Override A Named Beneficiary?
In the majority of cases, a divorce decree will not alter a beneficiary designation. Essentially, unless the policyholder changes the beneficiary, the individual or entity might receive the payout upon the policyholder’s passing, regardless of a finalized divorce.
This determination can also depend on the final terms of the divorce. Today, there are some certain laws that can override a named beneficiary.
Can You Remove Ex-Spouse As A Life Insurance Beneficiary?
Removing an ex-spouse as a beneficiary will again depend on the specific divorce terms. If the policyholder will not be supporting an ex following a divorce, it is quite possible to remove them from the policy.
If you have to pay alimony or child support, however, you may not have the option to change a beneficiary. It’s best to contact your trusted divorce lawyer in order to determine if it’s possible to remove an ex-spouse from your policy.
Conclusion
Following a divorce, you may wish to add your child to receive the death benefit from your life insurance policy. However, there are certain states that currently prohibit minors from accepting life insurance death benefits.
If you pass away prior to your child turning 18 years old, the court system will most likely hold up the death benefit payout. An experienced divorce lawyer can advise you on how a life insurance policy can impact your upcoming divorce.
Source:
-
- “Life Insurance Beneficiary Rules After A Divorce” Retrieved on July 14, 2025 from https://www.aflac.com/resources/life-insurance/life-insurance-beneficiary-rules-after-a-divorce.aspx
Ogborne Law, PLC In Scottsdale, AZ
Discussions about child custody issues are always difficult during a divorce. While there is no way to make them easy or comfortable, you can find ways to work together. The collaborative divorce process helps with tools and professionals to make child custody and other decisions a little more manageable. By working together as a team, you’re able to make the decisions that are best for the kids.
Collaborative divorce can make these challenging times more manageable. It requires you to work with your spouse at a time when you have decided you need to go your separate ways. When it comes to child custody, though, you want to do all you can to make the right parenting decisions. Collaborative divorce can help create pathways for you to cooperate. If you live in the Phoenix/Scottsdale area and want to learn more about collaborative divorce, contact Ogborne Law today.
