What to do With Your Term Life Insurance Policy if You Get Divorced

What happens with term life insurance when you get divorced will vary depending on the settlement. Depending on your situation, you might negotiate transferring ownership of your term life policy to your ex-spouse.

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Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites.

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Written by Tim Bain
Founder & Life Insurance Agent Tim Bain

Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent Benji Carr

UPDATED: May 12, 2022

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The one thing that’s certain about life is it’s anything but certain. Not everything goes our way or as we expect it to. Sadly, that applies to marriage, too.

No one (at least no one whom I’ve ever known) gets married thinking that it won’t last “until death do we part.” But people grow apart. People take each other for granted. People decide they want out.

Nearly half of all marriages end in divorce according to statistics from the CDC/National Center for Health Statistics.

So what do you do if you get divorced and have a term life insurance policy with your ex-spouse as a beneficiary?

The answer: It depends.

Term Life Insurance During a Divorce

Your options for life insurance after a divorce will vary depending on the divorce settlement.

Quite commonly, divorce agreements state that one spouse, generally the parent paying child support or alimony, must maintain life insurance on themselves to provide some financial stability for their ex if they pass away before they’ve met their financial obligations. So if you have a term life policy, you may need to keep it. If you don’t have a life insurance policy, you may need to apply for one if there’s a court order requiring you to get one.

Depending on your situation, you might negotiate transferring ownership of your term life policy to your ex-spouse. In that scenario, your ex-spouse would remain as the beneficiary while assuming responsibility for paying the policy’s premiums. Can’t pay the premium? Learn more here: What Happens if You Can’t Pay Your Term Life Premium.

What if you don’t have children and you purchased your term life policy to help your spouse pay off your home mortgage or pay off other debt if you were to die? You may want to discuss terminating the policy since its original purpose may no longer be a priority for you.

If you have older children dependent on you financially, another option might be to remove your ex-spouse as a beneficiary and change your children’s designation to primary beneficiaries.

These are just a few directions things could go. Again, your options will vary according to your divorce settlement and related court decisions.

Educate Yourself About Your Options and Get Expert Guidance

Although term life isn’t considered an investment in marital property like whole life insurance with a cash value, it still requires attention when you’re going through a divorce.

Talk with your attorney and a financial planning professional about your options. There’s no one-size-fits-all solution, so it’s important to discuss your situation with trusted experts who can cover all the bases.

Although I’m not divorced, I have a fair share of family members and friends who have gone through it. Whether a divorce is amicable or not, it’s extremely stressful. Empowering yourself with knowledge and sound advice won’t eliminate the heartache, but it can minimize the headaches.

Haven’t looked into the affordability of term life yet? Get a free, no-obligation term life insurance quote now and connect with a knowledgeable insurance professional who can answer your questions.

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