Young couples may get life insurance to help protect their dependent children, create a way to help pay for final expenses, help pay any residual debt or expenses in case the unexpected happens, or even build cash value. However, when couples part ways, it may be important to reassess the policy and make changes if necessary. You may not want to surrender the policy and apply for a new one, as this may involve a new life insurance medical exam. However, you may need to change your beneficiary or evaluate how divorce affects your ability to manage premiums. Here’s what to know about how divorce can affect your life insurance policy.
Life insurance as a marital asset
Permanent life insurance policies, like whole life insurance or universal life insurance, have a cash value component. This means the policy accumulates cash value over time. The cash value component grows with each premium payment, and it can attract interest or pay dividends. Cash value policies are considered a marital asset and contribute to your net worth. Depending on the terms of your divorce and life insurance settlement agreement, you may keep the policy or split the cash value component with your spouse.1
Does divorce trigger changes in a policy?
Divorce in and of itself may not trigger any changes in your policy. Also, a divorce decree does not override a named beneficiary.2 This is why it’s important to revisit your insurance policies during a divorce and update your beneficiaries. While you may not be able to name minor children as your beneficiaries, you can create a trust for your kids and name the trust as your beneficiary.
Life insurance on an ex-spouse
In most states, you can’t keep a life insurance policy on an ex-spouse. After a divorce, the two parties don’t have an insurable interest on each other anymore. Even so, if you don’t update your insurance beneficiaries after a divorce, your ex-spouse may have a valid claim to the death benefit if you pass away unexpectedly. The case may also end up stuck in probate court. You can avoid these complications by making sure you contact your insurance company and change your beneficiary or beneficiaries if you part ways with your spouse.
Court-ordered life insurance
When couples with kids split up, it’s common for the custodial parent to receive child support payments from the non-custodial parent. In some cases, courts may require the non-custodial parent to purchase life insurance to protect these child support payments. In this arrangement, the non-custodial parent pays premiums, and if they pass away suddenly, the death benefit replaces lost child support payments.
What to do with your life insurance when you get a divorce?
Knowing that divorce can affect your life insurance policy and other financial products during a divorce can seem daunting, but the tips below help cover some things you should know:
1. If you don’t have children
Many couples get life insurance right after getting married to help protect a spouse from lost income, debt, or end-of-life expenses. However, after a divorce, you can contact your insurer and change your beneficiary. This helps prevent claim and probate complications after your passing. If your policy has a cash value component, you can opt to cash it out and share the funds with your ex-spouse.
2. If you have children
Below are different scenarios that you may consider talking with a trusted financial advisor or your insurance agent about:
- Establishing a Trust: If you aren’t paying child support, but would like to establish a trust to help protect your child’s financial future.
- Maintaining an ex-spouse as beneficiary: If you’re making child support payments, and would like to keep your ex-spouse as beneficiary, so your death benefit can help replace child support payments.
- Appointing a guardian as a beneficiary: If you’re a single parent who would like to help protect your child with a life insurance policy and name a guardian as the beneficiary.
The bottom line
While life insurance for married couples makes sense, it’s important to reconsider your policy when you divorce. Remember to:
- Account for cash value
- Update your beneficiaries
- Create safeguards for your children (like trusts)
- Re-evaluate your finances to determine your budget and insurance needs
Talk to your insurance agent or company, as well as a trusted financial advisor or attorney, for more information on how divorce can affect your life insurance policy.
Sources:
1 NerdWallet – What to Know About Life Insurance and Divorce. Updated Nov 7, 2024. https://www.nerdwallet.com/article/insurance/getting-divorced-life-insurance. Accessed August 7, 2025.
2 Charles Ullman – Does a Divorce Override a Named Beneficiary? https://www.charlesullman.com/divorce-lawyer/override-named-beneficiary. Accessed August 7, 2025.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans – A68000 series: Term Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68200, A68300 & A68400. In New York, Policies NY68200, NY68300 and NY68400. Whole Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100. In Delaware, Policy A68100. In New York, Policy NYR68100. B60000 series: In Arkansas, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Not available in Delaware. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Arkansas, Idaho, Oklahoma, Oregon & Texas, Policy ICC18Q60200M. In Delaware, Policy Q60200M. Not available in Virginia.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY, VA or VT. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
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