Divorce can significantly impact who receives the death benefit from a life insurance policy. In many states, divorce automatically revokes an ex-spouse’s beneficiary status. But depending on whether your policy is governed by state or federal law, whether the beneficiary is irrevocable, and whether you lived in a community property state, your ex may still be entitled to a portion or even all of the payout.
Life insurance is often overlooked in divorce proceedings. Many people forget to update their policies, which can result in costly disputes. In at least 34 states, divorce automatically revokes an ex-spouse’s designation as a beneficiary. However, California, Delaware, Georgia, Maryland, Oregon, Rhode Island, Tennessee and Vermont do not have automatic revocation laws.
If you lived in a community property state: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin: premiums paid with community funds during marriage may entitle the surviving spouse to half the policy value, even if not named as beneficiary. Alaska, South Dakota, and Tennessee allow couples to opt into community property rules, but only if they formally agree.
It’s also important to consider policies governed by federal law, such as SGLI, FEGLI, or employer ERISA plans. Federal rules override state laws and typically award benefits to the named beneficiary on file, regardless of divorce or state court orders.
Disputes over life insurance after divorce are increasingly common. They often involve conflicting state and federal laws, questions of community property, or outdated beneficiary designations. Insurers frequently delay payouts or deny claims while reviewing these issues. Our firm has extensive experience helping clients resolve these conflicts, secure rightful payouts, and protect their interests in complex divorce-related life insurance cases.
Use our contact form or call us and we will evaluate your dispute.