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Spousal Rights to Life Insurance

Spousal rights to life insurance

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA.  Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

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It probably wouldn’t make a good scene in a horror movie, but it would be horrific.  Do you know what your spousal rights to life insurance are? Imagine for a moment that you’re a grieving widow. In your grief, you push aside your emotions and start thinking about your late husband’s life insurance policy. After all, you have to move on, and you have three kids to feed.  So you reach into a filing cabinet, search through the important papers, find the policy, and there it is, in black and white…

The beneficiary’s name listed on the policy is…

…his ex-wife.

Or maybe the beneficiary listed is his girlfriend, whom you didn’t know about.

Spousal Rights to a Life Insurance Policy

The latter hopefully doesn’t happen all that often, but in the first case, where someone divorces and forgets to take their ex off the life insurance policy, that’s a fairly common scenario. It’s common, at least from some anecdotal evidence I’ve picked up over the years.

Jim Oliver, owner of Jim Oliver & Associates, a San Antonio, Texas-based firm of business advisors and CPAs, agrees.

This does come up from time to time. We do find mistakes,” he says, adding that he and the other financial advisors at his firm often review life insurance policies of their clients. “And other documents,” he adds. “Your IRA’s, your 401K’s. Anything you have with a beneficiary on it, you’ve got to check it once in awhile.”

On that note, Jack Taylor, professor of retailing at Birmingham-Southern College, says,

I’ve seen this happen, and it’s something we discuss in my insurance law course. Naming beneficiaries is extremely important; more important than most people think. People tend to get mad when insurance agents bug them about doing annual reviews because they don’t want to be bothered with it, but they’re designed to help discover things exactly like this and can save a whole lot of headaches in the future.”

Life Insurance Policy Beneficiaries

So what happens if you find out that your husband or wife has a different beneficiary on your life insurance policy?

Don’t freak out. Your first instinct may be to throttle your husband or wife. After all, he has his ex on the policy. You’re upset, and you have every right to be. Especially if you’ve met the ex, this must seem like a big cosmic joke.

But while you’re probably understandably furious, don’t kill your spouse yet (at least wait until you get the policy changed). Talk to your spouse first and try to put yourself in his or her shoes. If you’ve been divorced yourself, you know — the end of a marriage can really run someone through the emotional ringer. Life insurance — or any insurance — isn’t on most people’s minds when they’re watching their lives crumble apart.

Questions To Consider About Your Spousal Rights to Life Insurance

So talk to your spouse. Odds are, when your husband or wife learns the ex is due to get a windfall of money, nobody’s going to be madder than your spouse for making a mistake. He or she will call your insurance agent and get this fixed. If it turns out that it isn’t a mistake, again, don’t lose it. Maybe everyone’s names — yours, the kids, your ex — are on there, and your spouse is simply being generous and thinking of the parent of his or her children?

It’s also important to remember that if your spouse is still making alimony payments, the court may have ordered him or her to keep your ex on a life insurance policy if something happens before those payments stop. In which case, the only question is — is there a policy for you, too?

Or, sure, especially if that’s a current girlfriend on the policy, maybe your marriage isn’t as happy as you thought.

My Spouse Is Deceased – Am I Their Beneficiary?

But what if your spouse is deceased? There’s no chance to contact the life insurance company and make a name change on the policy because your husband or wife isn’t around to do it. You still shouldn’t freak out — yet.

“First thing I’d say, if you’re in that situation, you call a lawyer,” Oliver says.

But then he adds that it all depends on your state and how it handles insurance. “Certain states have certain rules. In some states, they’ve already thought of this, and the ex-wife wouldn’t get the insurance proceeds, or you’d at least have the right to challenge that.”

But in other states, it’s not so cut and dry. Often, it comes down to whether you live in a community property state, and those states are:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

In these states, both spouses equally own the income earned during the marriage — which means if a life insurance policy was purchased during your spouse’s first marriage, his or her first spouse is entitled to some of that money.

Real Example of Spousal Rights

A case along these lines recently made the news after the California Supreme Court ruled that a $3.75 million life insurance policy, currently worth $400,000, that singer Frankie Valli (you know, the guy who sang “Sherry” and “Big Girls Don’t Cry”) and his ex-wife bought should be split between them because the premiums were paid from a joint checking account. This took a while to sort out, incidentally. They separated in 2004.

But if something like this happened to your spouse and his ex, you’re probably entitled, too, if this is permanent life insurance and you’ve also been paying premiums during your marriage. It would likely be pro-rated by the court. But that’s part of the fun, too. The rules differ not just by state but by what type of insurance policy you’ve purchased.

A Spousal Rights Expert Can Help

Again, consult a lawyer. And your insurance agent.

There may not be a happy ending with this. But what if you find that your spouse has listed a girlfriend or a boyfriend on the life insurance policy, and it wasn’t a mistake?

Again, consult a lawyer and your insurance agent — and a marriage counselor. But that said, for a non-legal but informed viewpoint, Professor Taylor doesn’t think you’ll have much of a legal leg to stand on.

“It’s the insured individual’s responsibility, duty, and right to name the beneficiary they choose, and it is just presumed that the name listed is the name they wanted,” he says. “Generally, the only way to have it changed is also to prove that the beneficiary was changed to someone else under duress or coercion, which is very challenging.”

For the rest of us, if you haven’t looked at your insurance documentation, you might want to check that out and ensure everything’s accurate and up to snuff. Hopefully, everyone reading this is in good shape. However, I’d hate to think of anyone, on account of something I’ve written, sleeping in the garage tonight.


FAQs on Spousal Rights to a Life Insurance Policy

What rights does a spouse have to a life insurance policy?

A spouse’s rights to a life insurance policy depend on the policy’s beneficiary designations. If named as the beneficiary, they have the right to the death benefit. In community property states, spouses may have rights to policies purchased during marriage, regardless of beneficiary designation.

Can a policyholder change the beneficiary to someone other than their spouse without their consent?

In most cases, a policyholder can change the beneficiary without needing spousal consent, except in community property states where such changes might require consent if the policy is considered marital property.

What happens to a life insurance policy in the event of a divorce?

During a divorce, the life insurance policy may be addressed in the divorce decree. The beneficiary can be changed, and the policy’s cash value might be divided as a marital asset, subject to the settlement agreement.

Is a spouse automatically entitled to benefit from a life insurance policy?

A spouse is not automatically entitled to be the beneficiary. The policyholder can name any beneficiary, but in certain employer-sponsored policies or those governed by federal law, spousal consent may be required for non-spousal beneficiaries.


Picture of Doug Mitchell, CLU

Doug Mitchell, CLU

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent close to 30 years in the life insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health. Some other notable items about Doug: Top of the Table Million Dollar Round Table member (MDRT). (MDRT is a global, independent association of the world’s leading life insurance advisors) | Premier Partner with Lincoln Financial and Cabinet Member | Served two years as President of the Auburn/Opelika Association of Financial Advisors | Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award | New York Life, Executive Council Member | Currently serves as President of Ogletree Financial, a life insurance General Agency. | Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

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