Life Insurance After Divorce

Can My Ex-Spouse Remove Me From Their Life Insurance?

Life insurance is designed to provide an added level of protection and security for your family and loved ones in the event of tragedy. Most people make the beneficiaries of such policies their spouse or their children. Yet, what happens to those life insurance policies after a divorce?

A life insurance policy is a contract between the insurer and the policy owner, and the policy owner generally has full authority to designate whomever he or she chooses as the beneficiary of the policy. Further, the policy owner can often terminate the policy or change the beneficiaries at any time, and many do so after a separation or divorce.

However, if the insured individual has a child support or spousal support obligation, the divorcing parties may want to keep that financial security net in place. Domestic Relations Laws in Virginia allow the Court to require that such policies and beneficiary designations be maintained in some circumstances. Additionally, parties can agree to maintain certain life insurance obligations through settlement agreements.

Under Virginia law, the court has the authority to order a policyholder to maintain an existing life insurance policy and designate their minor children (not the former spouse) as beneficiaries of that policy as part of a child support order.

However, a law passed a few years ago which extends that authority to cases involving spousal support. This law, VA Code Section 20-107.1:1, took effect on July 1, 2017, and allows the court to require the maintenance of life insurance policies (private or employer-provided), as well as the beneficiaries (including the former spouse), that were in existence during the marriage in cases where there is a spousal support award.

What if We Have a Cash Value Life Insurance Policy During a Divorce?

You will need to include a cash-value life insurance policy with your marital assets during the divorce process. The cash value could be subject to division as part of a divorce settlement and final court order. You also might be able to cancel the policy, receive the cash value, and split that amount with your ex-spouse. Your insurance company can provide more information about your options.

How Should I Change My Life Insurance Policy After Divorce?

If you and your ex-spouse have children, they will likely become the beneficiaries of your policy. Many divorce decrees require beneficiary designations for children as a form of child support, although this does not replace child support payments during your lifetime.

If there are no children, you will need to update the beneficiary designation if you do not want to keep your ex-spouse as a beneficiary. You might not be able to do this, however, in some situations, such as:

• Alimony provisions in your divorce decree prohibit you from removing your ex-spouse from a life insurance policy; or
• A prenuptial agreement or divorce agreement requires you to include them as a beneficiary.

Regardless of any changes in beneficiary designations, you should notify your insurance company about your divorce. They may need to update the policy to reflect your new marital status.

How Long After Divorce Can I Change My Life Insurance Policy?

You can update or change your policy during the divorce process, subject to any restrictions placed by the court. For example, a court might order you not to change any beneficiary designations while the divorce is pending unless it is part of a divorce settlement with your ex-spouse’s agreement. If you make changes to the policy despite a court order, the court could hold you in contempt.

After the divorce is complete, you may need to make changes to your coverage in order to comply with a court order. This might involve changing the beneficiary designations or obtaining new coverage. You can begin this process as soon as you are able.

What Are Some Potential Life Insurance Problems That Arise During a Divorce?

Problems that may arise during the divorce process may include the following:

• The policyholder changes the beneficiary without telling you; or
• They stop paying the premiums, resulting in the policy’s cancellation.

What Type of Life Insurance Should I Get After Divorce? 

Factors like child custody, child support, and alimony will affect the decision about what type of insurance you will need after divorce. One of the main purposes of post-divorce life insurance coverage is to protect child support and alimony payments if you die.

Several types of insurance policies are available that can provide benefits to your children, dependents, or others in the event that something happens to you. The following are the two most common types:

• Term life insurance tends to be less expensive, but it only covers you for a specified period of time.
• Whole-life policies cover you for the remainder of your life, and they build a cash value that you can claim during your lifetime.

Does Divorce Also Impact Your Health Insurance? 

Divorce will impact health insurance coverage since your ex-spouse will no longer be considered a family member. If your ex-spouse’s employer provided your health insurance, you might be able to purchase COBRA coverage for up to three years after the divorce. If your divorce decree orders you to pay child support, you might also have to keep your children on your health insurance plan or make other arrangements to provide them with health benefits.

Keep Your Life Moving Forward. Change Your Policy.

If you have questions about life insurance coverage during a divorce, the family law attorneys at ShounBach are here to help. Our firm handles a wide range of family law matters and has been recognized in Super Lawyers and the U.S. News list of Best Law Firms. We can assist people throughout Northern Virginia from our offices in Leesburg and Fairfax. Contact us today through our online contact form or at ​​(703) 222-3333 to find out what we can do for you.