Getting Life Insurance on a Former Spouse


We all know about the importance of getting life insurance on your spouse. In fact, life insurance policies between spouses, naming the other as primary beneficiary, are probably the most common forms of life insurance.

But what about getting life insurance on a former spouse? Is it possible? And if it is, how common is it?

As a matter fact, getting life insurance on a former spouse is actually fairly common. There are all kinds of reasons why it might be necessary.

Pursuant to a divorce decree

Probably the most common reason for getting life insurance on a former spouse is doing so pursuant to a divorce degree. The end of the marriage does not always translate into the end of joint marital obligations.

As a result, the parties in a divorce are often required to maintain life insurance on themselves for many years into the future.

The most obvious reason why a divorce decree would spell out the need for life insurance on a former spouse is if there are children of the marriage.

In most divorce situations, one spouse is the custodial parent, while the other will pay either child support, alimony, or in some cases both.

The existence of children creates financial liabilities by both parties. If the non-custodial parent who provides child support were to die, an important income stream for the children would be lost.

The obvious purpose of a life insurance policy in this case would be to ensure that there are sufficient assets to substitute for the lost child support.

But an obligation will also exist by the custodial parent, even if that parent pays no child support or alimony. For starters, the custodial parent is automatically absorbing much of the cost of rearing the children.

Were that spouse to die, the non-custodial parent would get custody of the children, and be required to take on all the obligations that were formerly covered by the deceased spouse.

This may give rise to the need for additional financial resources to pay for child care, housekeeping duties, or even additional educational expenses.

Still another example is where a divorced couple have a significant amount of either joint property, or joint debt.

For example, if the marital home is owned jointly, and it secures a mortgage which is also held in both names, each party will need to maintain a life insurance policy to payoff the mortgage in the event of the others death.

The divorce decree will spell out the need for such life insurance policies, the face amount of the death benefit, the length of time the policy needs to be in force, as well as which former spouse will be required to pay for the premiums.

There must be an insurable interest

In order to have a life insurance policy on anyone, there must be an insurable interest between the parties.

Insurable interest exists anytime one person will be adversely affected by the lack of financial contribution from the deceased party.

Unless this interest can be established, an insurance company may decline the application for life insurance.

In theory, an insurable interest can exist between any number of parties – even those who are completely unrelated by either blood or marriage – but with a former spouse it’s far more common.

We’ve already discussed insurable interests related to divorce decrees, but one can exist in other circumstances between former spouse’s as well.

One typical example would be the existence of a jointly owned business.

Even apart from the fact that the two parties were once married, partnered business owners typically do have life insurance policies on one another.

Doing so ensures the continuity of the business in the event of the other partners death.

Virtually any type of business, assets ownership, or debt that are held jointly will establish insurable interest between former spouses, even if there are no children from the marriage.

All parties must be aware and in agreement

A logical question that comes up involving life insurance policies on former spouses is does the ex-spouse need to know that you are holding a life insurance policy on him or her? The answer is yes, in all cases.

Since the life insurance policy will be on your former spouse, the application will request that person’s information and health history – not yours.

Since only your ex-spouse can fully provide that information, and sign the application, it will be impossible to not let them know that you’re taking a policy on their life.

In addition, if during the application process the insurance company needs additional information from the insured, they will contact your ex-spouse directly.

They will also need medical information from third-party providers, and that will require a written authorization from your former spouse.

It’s both possible and common to have life insurance on a former spouse.

There are just a couple of things you need to prove beforehand, and then it’s just like any other life insurance policy you take on any other person.