Most divorce decrees call for one of the parties to obtain a life insurance policy to insure the value of alimony payments, child support or some other financial need. The former spouse should be designated either the owner or irrevocable beneficiary of the policy.

If not, the ex-spouse who took out the policy can stop making payments and the other spouse would never know about it until the policy is needed and it no longer exists. This could be financially devastating. The owner or irrevocable beneficiary is notified of any outstanding issues with the policy, such as non-payment of the premium, and could therefore take action and prevent the policy from lapsing or being cancelled.