Divorce and Designation of a Beneficiary for a Life Insurance Policy
The general rule is that divorce does not, per se, affect or defeat a spouse’s rights as a designated beneficiary in a policy on the other spouse’s life, absent a change in beneficiary designation, a provision in the contract of insurance itself which makes the beneficiary ineligible if the status of spouse does not exist at the time of death, or a specific statute revoking beneficiary status on divorce.
The rule is not universal, however. Some states have divestiture statutes whereby the status of a spouse as named beneficiary is terminated by the entry of the divorce decree, without regard to the fact that the spouse remains the named beneficiary. E.g., Mich. Comp. Laws Ann. 552.101; Tex. Fam. Code Ann. 3.632(a)-(c); Va. Code Ann. 20-111.1; Wash. Code Ann. 11.07.010.
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CHANGE OF BENEFICIARY -- One of the important chores after a divorce is final is also one that is most often forgotten: changing the name of the beneficiary on any financial instrument that has one, including insurance.
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Life Insurance and Divorce
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