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Life Insurance in a Divorce Settlement

Divorce is probably the last thing on your mind on your wedding day. There is the talk of “forever” and “for better or worse,” and even just a thought of the marriage not working would be unacceptable.

After the wedding bliss wears off, the reality of marriage sets in. The truth is, over 40% of marriages end in divorce. Despite the increasing options for married couples for counseling, therapy, retreats and other solutions to try and extend the life of the marriage, many of them still end in separation. 

Preparing for Life Alone

The numbers won’t lie, divorce is a real possibility. When a couple separates, there are huge implications, both emotional and financial. 

For the financial aspect, there is an option to obtain a life insurance policy. You can actually demand that your ex-spouse avail of a life insurance policy. The reasons for this is to ensure the continuity of the following: 

  1. Alimony payments
  2. Child support
  3. Financial obligations like a mortgage for the marital home and business obligation

The court should make it clear that these are the only causes for compelling an ex-spouse to have insurance. In the absence of these, there is no reason to force another to avail of a life insurance policy.

Options for Existing Life Insurance Policy Holders

For those who already have life insurance policies even before the divorce was filed, one of the big questions is the beneficiary. The spouse is almost always the main beneficiary, so divorce is likely to affect that.

It may not be in your best interest to have your ex-spouse as your beneficiary since that means he/she will receive all the benefits of your policy. You can change the beneficiary of your policy to someone you still trust.

For the Providing Parent

Even if you are convinced to take a life insurance policy, you still have the freedom to choose. Compare the rates for various companies and choose the best for yourself, in terms of your health and income. 

You can also choose a policy that is based only on what you need. For example, a policy term that covers the period when your children are still minors.

For the Receiving Parent

If the situation permits, it is best to insist on being the irrevocable beneficiary of your spouse. This will ensure that the policy owner needs your concurrence if there are any major changes in the terms. Better yet, have the policy under your name. 

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Mr. Hutton is a Divorce and Custody Lawyer based out of Round Rock, TX. His background is with child psychology at Arizona State University where he received a B.S. in 2006, and he continued this by working with the Children’s Right’s Clinic at the University of Texas School of Law where he received his J.D. in 2009. Throughout his practice, he has been a strong proponent of utilizing modern technology to improve his practice and the representation of his clients. He currently is the technology chair of CAFA of Travis County and is committed to improving and modernizing the practice of law in Texas. If you have any questions you can contact him at

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