Can One Spouse Cancel a Joint Insurance Policy During a Divorce?

By Heather Frances J.D.

Divorce can take several months from start to finish, and spouses sometimes find it difficult to work together on family issues while their divorce is pending. One spouse might wish to change or cancel an insurance policy while the divorce is pending because he doesn’t want to continue paying for the policy or wants to change the beneficiary. Family court laws vary from state to state, but spouses cannot cancel their insurance policies until the divorce is final in most states.

Divorce can take several months from start to finish, and spouses sometimes find it difficult to work together on family issues while their divorce is pending. One spouse might wish to change or cancel an insurance policy while the divorce is pending because he doesn’t want to continue paying for the policy or wants to change the beneficiary. Family court laws vary from state to state, but spouses cannot cancel their insurance policies until the divorce is final in most states.

Automatic Restraining Orders

In some states, such as California, automatic restraining orders go into effect immediately when one spouse files for divorce. These restraining orders keep spouses from taking certain financial or administrative actions, not from physical contact with each other. The exact language of these restraining orders varies, but they often address insurance issues. For example, California’s orders prohibit either spouse from altering or canceling an insurance policy, including life and health insurance.

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Court Rules

In some states, statutes or court rules restrict a spouse’s ability to cancel an insurance policy during a divorce. For example, in New Jersey, spouses must file a certification along with their divorce pleadings stating they have not changed insurance within the last 90 days. Spouses are also prohibited from making changes going forward until the divorce is final. In this way, the court ensures policies stay the same, or as much as reasonably possible, until the spouses are divorced.

Division of Assets

Some life insurance policies have a cash value, such as whole life policies. The cash value of insurance policies is often considered a marital asset, subject to the court’s authority to divide in a divorce. If a spouse cancels or cashes in this type of policy before the court divides it in the divorce, the court may order the receiving spouse to pay the other spouse her marital share of the proceeds or give her a greater share of marital assets to make up for the lost policy.

Post-Divorce Insurance

Courts may order spouses to carry life insurance policies after the divorce, or the spouses can agree to continue their policies. An ongoing life insurance policy might help secure alimony and child support payments, giving the supported spouse a financial cushion if the paying spouse dies. Since child support and alimony stop when the paying spouse dies, a life insurance policy can provide income to the supported spouse or children to replace the lost support. If a spouse cancels a court-ordered policy after the divorce, the other spouse can go back to court for help enforcing the order to provide life insurance.

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Insurance Between Filing & Divorce

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Most states put a freeze on assets and other economic issues when you file for divorce. You're prohibited from changing anything, and this usually includes insurance coverage. In some jurisdictions, this is more than an unspoken rule. Depending on where you live, the court may issue temporary orders prohibiting you from terminating health insurance coverage, or you may have to sign a sworn affidavit, promising not to.

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