Divorce is rarely simple—and life insurance can quickly become one of the most overlooked, misunderstood pieces of the puzzle.
Can your ex stay the beneficiary? Who pays for the policy after separation? And what happens if you’re court-ordered to keep coverage for your kids?
If you’re navigating divorce (or already divorced), here’s what you need to know about what happens to life insurance—and how to protect your future.
Is Life Insurance Considered a Marital Asset?
It depends on when the policy was purchased and what type it is.
Here’s the general rule:
- Term life insurance is usually not considered a marital asset because it has no cash value.
- Whole life or universal life insurance, which build cash value, can be treated as a marital asset—especially if purchased during the marriage.
If the policy has cash value, that value may be subject to division during a divorce.
✅ Example:
If you bought a $100,000 whole life policy during the marriage that now has $12,000 in cash value, that $12,000 could be part of the asset split—just like a savings account.
Can an Ex-Spouse Stay the Beneficiary?
Yes—and in some cases, they must.
If you named your spouse as the beneficiary during the marriage and never changed it, they will likely still receive the payout unless you actively update the policy.
Many states require written consent to change a beneficiary during a divorce process, especially if the policy is tied to:
- Alimony
- Child support
- A divorce decree
In fact, some courts will order that your ex remain the beneficiary to secure ongoing financial obligations for children.
Court-Ordered Life Insurance and Child Support
It’s increasingly common for courts to require one parent (usually the higher earner) to maintain life insurance to ensure child support or alimony continues even after death.
This is called a court-ordered life insurance policy, and it may include:
- A minimum required death benefit (e.g., $250,000)
- The ex-spouse as the beneficiary
- Proof of coverage submission annually
- Restrictions on cancelling or changing the policy
🚨 Failing to comply with this order can result in legal penalties—including contempt of court.
What Happens to Policies Taken Out During Marriage?
If the policy was taken out during the marriage:
- It may be subject to division of value (if whole life)
- You may be ordered to maintain it for your ex or children
- You’ll likely need to submit paperwork to the court if you want to change beneficiaries
If it’s term life with no cash value, the court may not divide it, but it may still impact child custody or support negotiations.
Can You Change the Beneficiary Without Telling Your Ex?
Only if you’re not under court order—and depending on your state’s laws.
Some states have automatic rules called “revocation upon divorce” statutes. These laws remove your ex as a beneficiary automatically when the divorce is finalized (unless the decree says otherwise).
⚠️ However, this is not true in every state.
And if you fail to name a new beneficiary, the policy may pay out to your estate, triggering probate and delay.
What If the Policyholder Stops Paying After Divorce?
This is a common problem.
If your ex is ordered to carry a policy but lets it lapse, your children or dependents could be left with nothing.
Courts can enforce orders, but they typically don’t monitor payments.
To protect yourself:
- Request to be listed as a policy owner (or get duplicate notices of cancellation)
- Ask for annual proof of coverage
- Keep your own backup policy, if affordable
If your ex dies without an active policy, your only option may be to pursue their estate—which may not cover what’s needed.
Life Insurance Tips During and After Divorce
Here are some practical steps to protect yourself and your family:
✅ Review your current policies immediately after separation
✅ Talk to your attorney about court-ordered life insurance
✅ Name your children (via a trust or guardian) if you don’t want your ex as beneficiary
✅ Consider owning your ex’s policy if you’re the one relying on the death benefit
✅ Buy your own policy if you’ve lost coverage as a result of the divorce
Also, remember that minor children can’t receive a payout directly—you’ll need a guardian or trust in place to control the funds.
Final Thoughts: Protecting Yourself (and Your Kids)
Life insurance may not be top of mind during a divorce, but it should be.
Whether you’re protecting child support, replacing lost income, or simply trying to avoid future legal headaches, knowing your rights—and your responsibilities—can save your family from major financial stress.
If you’re unsure what to do, talk with a family law attorney and a licensed insurance agent to make sure you’re covered.
📌 Read Next:
- Can Life Insurance Cover Funeral Costs for Someone Who’s Already Died?
- How to Name a Beneficiary the Right Way (and Mistakes to Avoid)
- Whole Life vs Indexed Universal Life: Which Builds Wealth Faster?
