Life insurance after divorce

This content was reviewed and approved by Geoff Eaton and Fiona Robson.

What should I do about life insurance after divorce?

After a divorce, it’s recommended that you review your life insurance policy to ensure your loved ones are still financially protected. If you have a single policy, you’ll likely need to change the named beneficiaries to reflect your change in circumstances. If you have a joint life insurance policy, you and your ex-spouse will need to discuss what to do next. You could keep the joint policy in place or cancel it and purchase your own individual policies. On rare occasions some providers allow you to split a joint policy into two policies, although we don’t offer this feature at LV=. 

A lot depends on the type of life insurance you have, and whether you have single life cover or joint life cover. Below we explore the key considerations in greater detail.

1. Single life cover and divorce

Single life cover protects you as an individual only. Having two separate single life cover policies can be beneficial in the event of divorce, and you and your ex-partner may not need to make any significant adjustments.

When your circumstances change because of divorce, you may still want to check that your single life policy provides the financial protection you need, especially if you have children.

You may also consider changing your named beneficiaries if you no longer want your ex-partner to receive a life insurance payout should you pass away.

2. Joint life cover and divorce

Joint life cover protects both people on the policy but only pays out once, usually when the first person dies, after which the policy ends.

Some insurance providers allow you to split joint life cover into two separate policies in the event of a divorce. If you don’t have the option to do this, there are some alternatives (depending on your policy and insurance provider):

• Either you or your ex-partner takes over the existing policy, and the second person buys a new life insurance policy for themselves if they so wish. If you decide to transfer the policy to just one partner, you’ll need to complete a legal document with both signatures agreeing to the change.
• You cancel joint life cover and each take out a new single life policy based on your current situation. While there are benefits to this, your policy premiums are likely to be higher as you’ll be older than you were when you took out the original policy. You may also be required to undergo medical checks before your insurance provider agrees to a new policy.

If your relationship ends, you can also put your life insurance in trust to ensure your money goes to your children or other chosen beneficiaries if you’re no longer around.

Depending on your personal circumstances and how your policy is set up, you may also need to amend the beneficiary/ies named in an existing trust, or you may decide to create a trust, if there’s not one in place. If you’re not sure on what’s the best option, it’s a good idea to take financial advice.

What happens to mortgage life insurance after divorce?

Couples often take out life insurance when they get a joint mortgage. That way, if one of you dies, the other receives a payout to clear the outstanding debt. However, this type of life insurance may not be suitable after a divorce, especially if that means a change in living arrangements.

If you and your partner sell the property, you may decide to cancel your life insurance and explore other options better suited to your new circumstances.

Similarly, if one of you continues living in the same house, they may choose to take over the whole mortgage and the existing life insurance policy or take out a new one. Either way, this is probably a good time to review your life insurance if its main purpose is mortgage protection and ensure the policy still provides enough cover to pay off the outstanding debt.

Should I tell my life insurance provider about my divorce?

Yes, it’s important to inform your life insurance provider about any significant change to your personal circumstances like a divorce or separation as soon as possible.

Life insurance policies are normally calculated on specific facts about your life and may require to be notified within a given timeframe. Therefore, your provider will want to know if you and your partner go your separate ways, especially if you’ve taken out a joint policy together. If you don’t tell your life insurance provider and need to make a claim, they may not pay out.

It’s important to remember that providers make no distinction between life insurance for couples who are separated as opposed to divorced. That means that if you separate from your partner, and they’re named as a beneficiary, they’ll still receive a payout unless you make changes to your policy.

Any alterations such as updating your life insurance policy or changing your chosen beneficiaries must always be prompted by you, the policyholder. That way, even if you’re separated, you can still make a claim if the policy is intact, and you’ve kept up with the required payments.

Should I change my will after divorce?

If you’re going through divorce or separation, you may decide to amend your will if you don’t want your ex-partner to be the beneficiary of any of your assets when you pass away. This could involve appointing a new executor if you’d previously named your ex in this role.

If you decide to write a will, it could be beneficial to mention any life insurance policy you may also have, name the beneficiaries, and give details of how you’d like the money to be spent. That’s why it’s good to review both your life insurance policy and your will in the event of divorce or separation to avoid contradictions cropping up.

Do you need advice about life insurance after divorce?

If you're unsure about the effects of divorce on life insurance, LV= is here to help provide relevant information, or if you're looking for advice contact our partners at LifeSearch who can offer respected, honest advice on protection products from the whole of the market.