Is life insurance void after divorce?


Q. My husband and I are divorcing and we each have life insurance in our own names with each other as the beneficiaries. Once we divorce, do they become void?
— Unsure

A. A divorce doesn’t erase a life insurance policy.

The fact that a life insurance policy is “in force” means the owner, often the insured, has all ownership rights to the policy, said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock.

He said the owner can make changes to the policy or not, which includes changing beneficiaries, cancelling the policy or keeping it.

“A divorce does not make a policy void,” he said. “It may initiate making certain changes but the policies can in fact stay in force.”

Depending on your divorce agreement, the court may require you to maintain some level of benefit, he said. Plus, you may also want to maintain protection for personal reasons, or change your beneficiary.

“Be forewarned an insurance company could cancel your policies if you don’t continue to make premium payments so be sure to work together to ensure billing addresses are updated to avoid an inadvertent lapse,” Gaelick said.

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