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Manage your life insurance policies after divorce

Learn how to manage the beneficiaries of your life insurance when pursuing the difficult decision to divorce.


Life insurance isn’t something you typically think of until you marry or have children. And when you come to the difficult decision to separate, there’s the question of what to do with your policy post-divorce. We offer a few ways to protect yourself.

Divorce and life insurance for couples with separate policies

If you and your partner hold separate life insurance policies, you can simply update your beneficiaries to establish a new recipient of your policy’s proceeds at payout.

There’s one exception to this rule. If you designated your spouse as an irrevocable beneficiary on your policy, you need your spouse’s consent to remove them from your policy. That said, most insurers encourage you to nominate revocable beneficiaries, which you can change at any time — without an obligation to tell them.

If your ex-spouse is a revocable beneficiary, you can go ahead and nominate a different beneficiary. To do this, contact your insurance company and complete the required paperwork.

While you’re at it, consider reviewing your will, too.

Options for a joint life insurance policy after divorce

If you and your spouse hold a joint life insurance policy, these are three easy options to consider.

1. Maintain the joint policy together.

Many divorced couples simply maintain a joint policy after separation, agreeing to the terms for managing the premium payment. For example, you could offer to manage paying the policy’s premiums, and your ex would simply direct funds to your account over the life of the policy.

If this is the avenue you choose to take, protect yourself by putting a legal agreement in place that specifies the payment schedule.

2. One policyholder maintains the policy.

Another option is to transfer ownership of the policy into either your or your ex’s name. The person no longer on the policy would then need to research and purchase another policy.

Keep in mind that with this solution, you’d need to work out a payment for premiums paid in the past, since you will no longer benefit from the policy at payout.

3. Cancel the joint policy and take out separate policies.

You could also simply cancel the joint life insurance policy. But even this solution has its pros and cons:

  • It’s a simple solution to a complicated problem.
  • You won’t need to update beneficiaries.
  • You’ll be able to tailor a new policy that fits your needs.
  • You risk increased premiums if you took out the joint policy when you were much younger.
  • You may be required to undergo medical underwriting — or submit your medical and health information for evaluation by the insurance company before it can extend coverage.
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Should you keep a joint policy after divorce?

If you don’t have a family or children, you may not want to bother with life insurance after the breakup. Because you’d no longer need to provide support for eventual beneficiaries, you could cancel it altogether.

However, if you do have a family or are now the sole provider in your household, you’ll want to establish adequate life insurance coverage.

Reviewing your life insurance policy after a divorce settlement

Whether you amend your existing life insurance policy or end up switching insurers, be sure to take out a policy that suited to your needs — including a payment that you can afford — and provides adequate coverage.

Other factors to consider:

  • Total coverage issued by your life insurance company, as well as annuities it’d pay out.
  • How changes to your salary would affect your premiums.
  • Any new assets that you have acquired.
  • Any coverage that has accumulated in your retirement accounts.
  • Additional options, such as trauma and total and permanent disability coverage.
  • The policy’s payment structure for premiums.
  • How your health has changed since taking out your first policy.

Given the many details involved in reviewing your policies after a divorce, you may want to seek the assistance of a financial planner or insurance specialist to assess your situation for a policy that’s perfect for your situation.
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