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Divorce and Your Changing Life Insurance Needs

Getting divorced is never easy. Splitting your finances, possessions, and even the custody of your children can be a tedious and grueling process that will leave you emotionally drained. During the hustle and bustle of this transition period, long-term obligations like life insurance often go unnoticed, which can reopen old wounds down the road without proper planning.

There are many details to sort out during the divorce process, one of them being life insurance. Typically life insurance is in some way connected to your spouse and you will need to determine what changes need to be made to make sure you are covered for the future. Here are two factors to consider when it comes to life insurance after divorce.


When you apply for a life insurance policy, you designate your beneficiaries (the person or people who will receive the payout of a policy when you die) up front before the policy even goes into effect. This means that if something happens down the line that causes the owner of a policy to not want their initial beneficiary to receive their death benefit, it’ll still go to the beneficiary they chose during their application unless they take action to edit the policy.

For example, if Harry married Sally and got a life insurance policy on himself during their marriage, odds are that he would choose Sally to be the policy’s primary beneficiary. If Harry and Sally split up a few years later, and Harry dies shortly after that without changing his beneficiary, in most cases, Sally would have a solid case that she should receive Harry’s face amount, even if Harry married someone else that depends on that money in the interim.

Normally, changing the beneficiaries of a life insurance policy is fairly simple – it’s just a matter of getting in touch with the insurance carrier and submitting a quick form with your new beneficiary details. With a little help from your agent or customer service representatives with the carrier, you can submit a request for a beneficiary change and have it take effect within a few days.

However, divorce throws a few legal wrinkles into the process, especially during hearings.

Even in situations where the divorcees won’t be financially invested in one another, during divorce hearings, it is likely that the policy owner will need to either get direct consent from the spouse being removed from the policy or a ruling in their favor in order to make a beneficiary change during the proceedings.

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During the Divorce Process

The primary factor that complicates the beneficiary change process is the Temporary Restraining Orders that are put into place as soon as the petition for divorce is filed. These Temporary Restraining Orders are placed on both spouses in order to protect the rights of both parties and mitigate the possibility of one spouse bamboozling the other and leaving them with nothing.

TROs lock down and prevent a lot of shady actions that jilted spouses might try during a divorce, including:

  • Packing up the kids and moving to another state overnight
  • Cleaning out joint bank accounts
  • Cancelling home or auto insurance policies
  • Taking out loans using jointly-held assets or collateral
  • Removing funds from one partner’s retirement account

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