Divorce is a life-changing event that affects not just personal and emotional well-being but also has major financial implications. One often-overlooked area is life insurance. Many people assume that divorce automatically cuts off their ex-spouse from receiving life insurance proceeds, but this is not always true.
Does Divorce Automatically Revoke a Life Insurance Beneficiary?
The short answer: not in every state. While many states have "automatic revocation" statutes that remove an ex-spouse as the beneficiary of a life insurance policy upon divorce, several states do not have such laws. In those states, if you don't actively change your beneficiary designation, your ex-spouse may still legally receive the death benefit after your passing.
States Without Automatic Revocation Statutes
According to current research, these states do not have automatic revocation statutes that remove an ex-spouse as beneficiary:
California
Delaware
Georgia
Maryland
Oregon
Rhode Island
Tennessee
Vermont
If you live in one of these states, you must proactively update your beneficiary designation or consider other options to prevent your ex-spouse from receiving life insurance benefits.
What You Should Do After Divorce
If you don't want your ex-spouse to benefit from your life insurance policy:
Change the Beneficiary: Contact your insurer and complete a new beneficiary form. This is often the simplest and most effective option.
Consider a New Policy: In some situations, especially where divorce decrees or court orders require you to maintain a policy for your ex-spouse or children, you might need legal advice before making changes.
When Your Ex-Spouse Might Still Have Rights
Even in states with automatic revocation statutes, there can be exceptions:
Court orders or divorce agreements requiring the policy to remain in place for the ex-spouse's benefit.
Federal policies (like employer-provided group life insurance governed by ERISA) which often preempt state laws.
Policies governed by other contractual agreements.
Denied Claims and Appeals
If your ex-spouse's claim is denied based on an automatic revocation statute, they might appeal, arguing that they still have rights under the policy or that state law doesn't apply. Conversely, if you're a rightful beneficiary whose claim was wrongly denied, you can appeal and challenge the insurer's decision.
Our experienced life insurance attorneys can help you navigate these complex legal issues, protect your rights, and fight to ensure benefits are paid to the correct party.
Contact Us
Understanding the law around life insurance and divorce can save your family from costly legal battles and heartache. If you have questions or face a denied claim, call our team today for a consultation.