The Legality of Forced Life Insurance Policies in Divorce

By Heather Frances J.D.

Divorce may not end the spouses’ dependence on each other; one former spouse may rely on the other for ongoing child support and alimony payments. If the paying spouse dies, the receiving spouse may find it difficult to make ends meet, so a divorce decree can require one ex-spouse to carry a life insurance policy and assign the proceeds of that policy to the other ex-spouse.

Settlement Agreement

In a divorce, it’s common for a couple’s property settlement agreement or divorce decree to order one spouse to assign the proceeds of a life insurance policy to the other spouse, typically to secure the paying spouse’s obligation to pay alimony or child support. The settlement agreement may be drafted in a way that gives specific instructions to each spouse about their involvement with the life insurance policy. For example, the settlement agreement may specify the type of policy and amount to be procured, beneficiaries to be listed, and length of time the paying spouse must maintain the policy.


Even if a couple’s settlement agreement appears clear, problems can arise when one spouse is forced to carry a life insurance policy. For example, the spouse who is forced to maintain the policy might let it lapse or change the policy's beneficiaries. To prevent such problems, the spouse protected by the policy can ask to be notified if payments on the policy lapse. In the alternative, the protected party can become the owner of the policy.

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Federal Insurance

If the spouse being forced to carry life insurance is a federal government employee, the other spouse can submit the court order to the covered spouse’s human resources office at his place of employment. Under federal law, the court’s order controls the payment of death benefits provided by the Office of Federal Employees’ Group Life Insurance, so by submitting the court order, the receiving spouse guarantees she will receive these life insurance benefits when the insured spouse dies. Typically, a certified copy of the court order is submitted shortly after the divorce becomes final and before the insured spouse dies.

Claims Against the Estate

If the deceased spouse failed to maintain a life insurance policy in accordance with a settlement agreement or divorce decree, or changed the policy's beneficiaries before his death, the receiving spouse may make a claim against the deceased spouse’s estate. As long as the decedent has sufficient assets in his estate, the receiving spouse could get as much from her claim against the estate as she would have received from the proceeds of the life insurance policy had it been properly maintained by her ex-spouse.

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Divorce & Distribution of Life Insurance Benefits

Life insurance needs often change with divorce. Depending on the type of insurance, the life insurance policy can even be divided as marital property in your divorce decree. If you choose to list your ex-spouse or your child as the beneficiary of your policy after your divorce, make sure the beneficiary designation is in accordance with your state’s laws to avoid unintended results.

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