Can an ex-spouse collect on my life insurance?

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Important things to know...
  • If your life insurance policy is not addressed in your divorce decree your ex-spouse may be able to collect the benefits if they were the original beneficiary.
  • Ownership of the policy usually determines who can change the beneficiary.
  • In a community property state, the ex-spouse must sign off for the beneficiary to be legally changed.
  • In many states, the person whose name appears as beneficiary is entitled to the life insurance benefits, even if they are no longer the spouse.

When couples go through a divorce, there are a lot of details that have to be addressed, so sometimes there are items that are completely forgotten. Changing the beneficiary on a life insurance policy is one of the most forgotten items, during this difficult time

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What Typically Happens in a Divorce


Typically, spouses name each other as beneficiaries. During a divorce, beneficiaries cannot be changed until after the divorce is settled. The divorce decree will state who is the owner of the policy and who is the beneficiary.

When policies are not included in the divorce decree is when things get complicated. If it is not specified in the divorce decree, the insurance company can prevent a change in the beneficiary, leaving the former spouse as beneficiary.

Who gets the benefits is a question asked by many divorcee’s, because they may have forgotten to think about their life insurance at the time of the divorce.

The answer to the question depends on where you lived at the time of the divorce and also who is named as the owner of the insurance policy.

The Basics of Life Insurance Ownership and a Divorce

If you are getting divorced, it is important to address all assets, including life insurance policies. The owner of a life insurance policy is the one who can change the beneficiary and other aspects of the policy.

Before the divorce is final, if you are the beneficiary of the policy, you should also have yourself named as the owner as well.

If you don’t, your ex-spouse can potentially change the beneficiary later on.

If you are the owner of the contract, you may want to continue paying the premiums yourself, because if you are relying on your ex-spouse to pay it, and he/she does not, the policy will lapse.

The main point is to deal with this asset at the time of your divorce, so there are no sore feelings later, down the road.

Community Property States


In states like California, which are community property states, the insurance company requires the ex- spouse named as beneficiary, to sign off on a policy to change the beneficiary or that a copy of the divorce papers is attached to the policy in order to legally change the beneficiary.

If the parties to the divorce fail to list the policy in the divorce papers, and later the other ex-spouse wants to change the beneficiary, it may be too late, unless the beneficiary agrees. In California, a divorce decree is not enough all by itself to change a beneficiary designation.

The lesson to be learned here is that you should include all life insurance policies in the divorce settlement. The courts will not usually change things for you if you accidentally forget this small detail.

State of Illinois

In the state of Illinois, if you own the insurance policy and you are also the beneficiary, at the time of death, you will receive the proceeds, even if you are the ex-spouse.

Illinois law leans more heavily towards the named beneficiary as the controlling factor and looks at the “spouse of” only as a description of the beneficiary. The divorce decree does not automatically terminate the beneficiary designation.

If the divorce decree states that each person gives up claims against the other, a beneficiary change is not assumed.

To be sure of a change in beneficiary, the life insurance policy benefits must be specially addressed in the divorce settlement, and one of the spouses waives their right to claims against that asset.

Another way to defeat a beneficiary’s claim against life insurance proceeds is the ‘substantial compliance test.’ This is when it is determined that the decedents’ intent to change the beneficiary is accompanied by substantial actions to comply with the insurance company’s requirements for changing the beneficiary.

Automatic Revocation of Ex-Spouse as Beneficiary


In some states, at the time of a divorce, the beneficiary designations on life insurance policies are automatically revoked.

If a new beneficiary is not named or specific language does not state the ex-spouse will remain the beneficiary, the proceeds are paid to the estate of the deceased or to those who would be expected to receive benefits remaining primary beneficiaries.

You should check to see if your state is a revocation upon divorce state.

When you are planning to get a divorce, it is a good idea to remember to include your life insurance policies in the settlement.

Change beneficiaries at that time so that you will not run the risk of having your ex-spouse collect death benefits, if you would prefer someone else to receive them.

In many cases, your ex can collect if you have been forgetful and left him/her as beneficiary if you live in a state that does not automatically revoke your beneficiary at the time of divorce.

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