Can a Parent Remove Their Child as a Life Insurance Beneficiary After Divorce?
In short, not legally—if a court has ordered that the child remain the beneficiary. Yet, many divorced parents unlawfully change their life insurance beneficiary designations, cutting children out of benefits they’re entitled to. Life insurance companies often don’t catch these violations, leaving grieving children and custodial parents to fight for what’s rightfully theirs.
This article highlights a real-world example of this exact situation: a court-ordered beneficiary designation ignored, a secret change made, and a wrongful denial of benefits that only a legal battle could undo.
Divorce, Life Insurance, and the Duty to Protect Children
Roughly 40% to 50% of American marriages end in divorce. Most involve children, and courts go to great lengths to shield those children from the financial fallout of the split. That includes reviewing key assets, like life insurance, and determining how they should be structured post-divorce.
In many divorces, courts require each parent to maintain life insurance for the benefit of their children until they reach adulthood. This ensures that, if one parent passes away, the children won’t suffer a devastating financial loss on top of their grief.
But what happens when a parent ignores this order?
A Case of Disregard: When a Father Tried to Rewrite the Rules
Tom and Linda were married in 1992 and welcomed a son, Timothy, in 2000. Like many marriages, theirs suffered under the weight of stress—particularly around raising a child with ADHD and learning disabilities. By 2011, the couple divorced after Tom began an affair.
Tom, a high-earning physician, had a generous employer-provided life insurance policy worth $2 million. During the marriage, Linda was the beneficiary. After the split, the court ordered Tom to name Timothy—then 11 years old—as the sole beneficiary. The judge’s order was clear: Tom must keep the policy (or a replacement policy) in place for Timothy’s benefit until Timothy turned 21.
Tom, however, had no intention of following through. Confident that no one would be watching, he submitted a new beneficiary form just six months later, naming Pamela—the woman with whom he’d had an affair and now planned to marry. The life insurer processed the change without question.
No one informed Linda. And no one informed the court.
A Fatal Accident Sparks a Legal Battle
Three years after the divorce, Tom died in a skiing accident. He had completely cut off contact with Linda and Timothy, and they only learned of his death by reading the local newspaper.
Linda acted quickly and filed a claim on Timothy’s behalf, supported by the divorce decree. Unbeknownst to her, Pamela also filed a claim as the designated beneficiary on file with the insurer.
Despite the court order, the insurance company issued a claim denial letter to Linda, stating that Pamela was the rightful beneficiary. The policy paperwork reflected her name, and the company claimed that it had no knowledge of the court's requirement for Timothy to be the beneficiary.
Courts Weigh In: Divorce Decrees vs. Beneficiary Forms
Outraged, Linda contacted her divorce lawyer, who referred her to a life insurance litigation attorney. After reviewing the case, he filed a lawsuit naming both Pamela and the insurance company as defendants.
The lawsuit did not ask for anything extraordinary—only for the court to review the divorce decree, the beneficiary change, and the insurance company’s actions. The question before the court was simple: who should receive the $2 million life insurance payout, Pamela or Timothy?
The answer lay in the court order. While Tom had clearly intended for Pamela to receive the money, he was legally prohibited from making that change. Courts consistently hold that a divorce decree trumps a later beneficiary designation if the policyholder was required to maintain the prior designation.
Life Insurance Companies Rarely Investigate Court Orders
One of the critical failures in this case—like many others—was the life insurance company’s lack of due diligence. When Tom submitted the new beneficiary designation, no one asked whether there were any court orders in place. Insurers are not generally required to investigate divorce proceedings or verify that changes comply with legal obligations.
Instead, insurers simply follow the latest paperwork on file. That’s why beneficiaries wrongfully cut out of policies must take legal action to enforce their rights.
Had Linda not filed suit, Pamela would have received the payout, and Timothy—the rightful beneficiary—would have received nothing.
Lessons for Custodial Parents and Ex-Spouses
This case is a cautionary tale for anyone involved in a divorce that includes children. If a court orders life insurance for a child’s benefit, that order must be enforced. But enforcement doesn’t happen automatically.
If you're a custodial parent, you should:
Request confirmation from the insurance company that the correct beneficiary is on file
Periodically verify that the policy is still in force and the court-ordered beneficiary hasn’t been altered
Retain a copy of the divorce decree and keep it accessible in the event of a dispute
Take immediate legal action if you suspect the policy has been wrongfully changed
What to Do If Your Child Was Removed as a Life Insurance Beneficiary
If your ex-spouse changed their life insurance beneficiary in violation of a divorce decree, you have legal options—but only if you act quickly.
You may be able to:
File a lawsuit to recover the full benefit for your child
Obtain a court order overriding the beneficiary designation
Challenge the insurer’s claim denial on the grounds of court-ordered obligations
At our firm, we specialize in cases just like this. We represent children, custodial parents, and other rightful beneficiaries who’ve been wrongly denied the insurance proceeds they deserve.
Let Us Help Protect Your Child’s Rights
Courts may prioritize children’s welfare in divorce, but life insurance companies often ignore those intentions—especially when it affects their bottom line. If your child was supposed to be the beneficiary of a life insurance policy but was removed, don’t give up.
We know how to enforce divorce orders and recover the benefits that rightfully belong to your child. Contact us today for a free case evaluation. We handle wrongful life insurance denials in all 50 states.