FREQUENTLY ASKED QUESTIONS

Your spouse that you have been married to for several decades passes away. In the midst of your grieving, you file a claim on his life insurance policy, only to find out that you are not the named beneficiary. Instead, his first wife, whom he was married to for a short period of time decades ago, is. You are outright horrified and in complete and utter disbelief, and understandably so!

You can’t help but wonder how your spouse didn’t leave his life insurance to you and wonder if he was obligated to do so.

This scenario raises a very important question: Are you required to leave your life insurance to your spouse? Like most questions concerning insurance, the answer to this question is: it depends.

Who Can You Leave Your Life Insurance To?

leave life insurance to spouseGenerally speaking, the owner of a life insurance policy has the right to name anyone he or she wishes as a beneficiary. Of course, a spouse is usually the foremost individual that is selected as a beneficiary; however, other individuals that a policy holder may leave a life insurance policy to might include:

  • A child
  • A sibling
  • A parent
  • A business partner
  • An aunt or uncle
  • Someone he or she is having an extramarital affair with

In short, insurance providers do not make moral judgments when it comes to who is named a beneficiary. That means that if the insured is married and chooses to name a child, a business partner, or even a girlfriend or boyfriend as the beneficiary, the insured has every right to do so. In other words, the insurance company does not have to approve who the policy will be paid out to; they simply have to pay it out to whoever is named the beneficiary.

Essentially, a life insurance policy serves as a contract between the policy holder and the issuing insurance provider. That contract states that the policy holder will pay the premiums for the policy, and that the insurance provider will pay out the benefits to the beneficiary when a claim is submitted. That’s it.

Does a Spouse have a Right to Life Insurance Payouts?

If you are the spouse of someone who did not name you a beneficiary, or you are the owner of a life insurance policy and you do not wish to name your spouse as a beneficiary, you may be wondering whether or not a spouse has a legal right to the insurance payout. Typically, a spouse will not have any legal right to claim life insurance benefits if somebody else has been named the beneficiary.

There is an exception to this however, and that is in locations that are considered “community property states”. In these states, both spouses equally own any income that has been acquired during the course of the marriage, as well as any property that was purchased with that income, including life insurance policies. Community property states include:

Tennessee and Alaska are what is known as “opt-in states”; in other words, married couples can determine if they would like to add- or opt-in for the community property laws of the state.

What if You want to Exclude a Spouse?

There are several reasons why one spouse may want to exclude the other spouse from a life insurance policy. Whatever the reason, if you decide that you do not want to include your spouse as a beneficiary, there are several issues that could arise that you should be aware of.

First and foremost, if you live in a “community property state”, as mentioned above, your spouse would still be able to receive benefits, even if he or she was not named a beneficiary. In that case, the individual you named a beneficiary would not receive the full benefits of your policy. Additionally, if you want to exclude your spouse from your life insurance, your insurance company may require a consent form be signed by the spouse who is not insured by the policy.

What if the Beneficiary Wasn’t Updated?

In the scenario mentioned in the beginning, where the wife of a deceased husband found out that his life insurance was left to his ex-wife… This type of situation usually arises because a spouse forgets to update the beneficiary after divorcing and remarrying.

In some states, there are laws that will automatically revoke the beneficiary status of an ex-husband or ex-wife as soon as the divorce is finalized; unless, however, the life insurance policy is an agreement in the divorce.

If you want to exclude your spouse from your life insurance, or if you are wondering if you are automatically entitled to a payout from your spouse’s life insurance, speak to a reputable insurance provider.

7 Comments

  1. My ex-husband and I took out a life insurance policy while we were married. He and his mother have been paying on the policy ever since . I have found the company but can’t find my policy number. The company is thru colonial Penn, can u help me ?

  2. My wife passed away. I filed to get her pension. A life insurance policy went along with it. The benefit person informed me that the pension goes to the ex husband per decree on the divorce papers.. I looked at it and didn’t see it. The benefit person and ex husband said he’s entitled to it. Even though both have remarried.

  3. I was the owner of this policy. Policy purchased 1964 as a family plan. We were married 47 years, My X-Husband was the insured. My X-Husband passed away. The X-Husband remarried 6-7 years now. He named his 2nd wife as Beneficiary. I was the beneficiary @ 100% if anything happened to me, then my children would receive 33 1/3% of policy. There was no will. Can my husband change the beneficiary if I am owner & paid the monthly payments all those years without consent from me? Do I have a right to @ least 1/2 of this policy or all of this policy. Do I have the right to contest these policies. The insurance company should have notified me of this change.
    Correct? Please advise. Thank you in advance for your prompt response to my dilemma. Respectfully, Mary Anne Poppa.

    1. Hi Mary Anne. The owner of the policy has the right to change the beneficiary (or co-owner), not the insured person. If your ex-husband was co-owner he would have this right. When you were divorced, did the settlement agreement or divorce decree speak to the proceeds of the insurance policy?

  4. Con: I moved to NC 7 years ago. I am from Ct. My X-husband lived in CT.
    I thought that would make a difference. The state deceased was from.
    Frank & I were married in CT married for 47 years, I knew him for 59 years.
    I do not know if that makes a difference, but, I need your assistance, if you can give me
    Your opinion. Do I need to hire an Attorney? Do I have a case?
    Thank you again, Mary Anne Poppa.

    This is additional information you may need. Please note,I did not place this info in above comment.
    Thank you again,

    1. The State that you currently reside in shouldn’t matter. You should seek the advice of an attorney if you were the owner and the insurance company incorrectly allowed a beneficiary change, or the change went against the divorce agreement.

  5. My husband and I are separated (in other states for a couple years) and I have my life insurance set up to go to my ex (father of my children) so he can raise the kids with the money. We live in a community property state, so does that mean my now husband (who lives in a non community property state) could go after the life insurance?
    If so, Would it be more protected if I have a Will?

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