What You Should Know About Life Insurance & Divorce

"Can my spouse remove me as a beneficiary on their life insurance policy?" We get this question a lot. In a word, yes. However, there are two specific timeframes that come into play. Your spouse can remove you as a beneficiary on their life insurance policy IF:

  • The divorce action has not begun.
  • The divorce has been finalized.

On the other hand, if you are in the middle of a divorce, the answer is not as straightforward. This is because many states impose what's called an ATRO (Automatic Temporary Restraining Order) upon couples during the divorce process.

An ATRO blocks either party from changing beneficiaries, selling or securing a loan against property, or modifying bank accounts, etc. without the other spouse's consent and/or the court's.

Life Insurance, Alimony & Child Support

When you dig a little deeper, the issue of life insurance gets more complex because life insurance policies are often used as tools in divorces to secure alimony and child support payments.

To illustrate: if your soon-to-be ex-husband will be the one paying alimony and child support, the court may require that he maintains a life insurance policy in order to guarantee that he will uphold those payments.

On another note, if your spouse is the higher earner who will be paying alimony and/or child support, we highly recommend that you purchase a life insurance policy on him to secure those divorce settlement payments.

You want to do this before the divorce is finalized, and you want to put yourself as the owner and the beneficiary of the policy. This way you ensure that he gets a medical exam, that the payments are made on time, and that the beneficiary(s) won't be changed without your knowledge.

To learn more about life insurance and divorce, please contact a Los Angeles divorce attorney from Claery & Hammond, LLPfor a free consult!