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 one of the most overlooked assets in divorce proceedings. While many people focus on dividing property, sorting custody arrangements, or adjusting financial support, they forget to update or even discuss their life insurance policies. But failure to do so can result in costly disputes down the line. We recently won a $1.2 million MassMutual case involving a post-divorce beneficiary dispute, where the insurer initially refused to pay the rightful party. These cases are increasingly common.
Revocation Upon Divorce: Does It Cancel Your Ex-Spouse’s Rights?
In at least 26 states, including California, Florida, and Texas, divorce automatically revokes an ex-spouse’s designation as a life insurance beneficiary. This legal principle is called “revocation upon divorce” and applies to non-probate assets like life insurance, retirement accounts, and pay-on-death bank accounts.
That means even if the insured forgets to update their policy, the law treats the ex-spouse’s designation as void. However, insurers don’t always know about the divorce or apply these laws correctly, which can lead to delays or wrongful denials. You may still need to go to court to confirm the rightful beneficiary.
States that follow revocation upon divorce laws include:
Arizona
Michigan
New Jersey
Ohio
Washington
Wisconsin
(...and 20 more)
Community Property Complications in Divorce
If you lived in a community property state, divorce might not sever your ex-spouse’s financial interest in a life insurance policy—especially if marital funds were used to pay premiums. This legal framework views all earnings and assets acquired during the marriage as jointly owned.
Let’s say the insured bought a policy before marriage but continued paying premiums during the marriage using shared income. Even if the beneficiary was updated post-divorce, the ex-spouse might still be entitled to a share of the payout based on the portion paid during the marriage.
Community property states include:
California
Nevada
Texas
New Mexico
Washington
These disputes often lead to partial payouts or court-ordered settlements.
Irrevocable vs. Revocable Beneficiaries
Most life insurance policies allow policyholders to name either a revocable or irrevocable beneficiary.
Revocable Beneficiary: Can be changed at any time without the beneficiary’s permission
Irrevocable Beneficiary: Cannot be changed without the beneficiary's written consent
If your ex-spouse was named as an irrevocable beneficiary during the marriage, divorce typically won’t change that status. Courts rarely override this type of designation, especially if it was intended to secure child support, alimony, or financial protection.
This is why many people unintentionally leave their ex-spouse as the permanent recipient of their policy—long after the relationship ends.
State Law vs. Federal Law: Who Has the Final Say?
The question of who gets the payout can also come down to whether the life insurance policy is governed by state law or federal law. When federal law applies, it overrides state divorce laws—even if the state would otherwise revoke the ex-spouse’s rights.
Examples of federally governed policies include:
Servicemembers’ Group Life Insurance (SGLI)
Federal Employees’ Group Life Insurance (FEGLI)
Employer-provided life insurance under ERISA
For example, in SGLI cases, courts have repeatedly ruled that the named beneficiary on the policy gets the payout—regardless of divorce or court orders.
So even if a state judge orders a servicemember to leave their ex-spouse as the beneficiary, the named person on the policy gets the benefit under federal rules. If you need New Mexico interpleader lawsuit guidance call us.
Why Divorce Often Leads to Delays or Denials
If a life insurance company is unsure about who the rightful beneficiary is after a divorce, they may delay paying out the benefit or deny the claim altogether. These delays usually occur in disputes involving:
Revocation upon divorce statutes
Community property interests
Conflicting state and federal laws
Allegations of fraud or lack of notice
Unfortunately, many families don’t realize they need legal support until a claim has already been denied or delayed for months. Life insurance companies rarely make these cases easy. They often wait for someone to initiate legal action or accept a reduced payout.
We Can Help Resolve Divorce-Related Life Insurance Disputes
Our law firm specializes in untangling complex life insurance situations involving divorce. We’ve successfully resolved cases where insurers wrongfully paid an ex-spouse, refused to honor community property interests, or froze payouts for months while “investigating.”
We understand how these laws work, how courts interpret them, and how to fight for your rights. Whether you're an ex-spouse, new spouse, or named beneficiary facing delays, we’ll step in quickly to enforce the law and get you what you’re owed.