life insurance policies in a divorce?

life insurance policies in a divorce?

Understanding Life Insurance Implications in Divorce

The impact of divorce on your life insurance hinges to some extent on the type of policy you hold.

  1. Term Life Insurance: Generally, term life insurance is not considered part of matrimonial property and remains unaffected by divorce.
  2. Permanent Life Insurance: In cases of permanent life insurance, the cash value within the policy might be regarded as matrimonial property subject to division between the spouses.
  3. Joint Life Insurance Policy: If you possess a joint life insurance policy covering both spouses, it’s likely advisable to divide the joint policy into two individual policies.

Updating Beneficiaries Post-Divorce

For individual life insurance, whether personal or group coverage, altering the policy’s beneficiary is essential if you wish to prevent your ex-spouse from receiving the payout upon your demise. Designating a child, family member, or another eligible beneficiary is necessary for this change.

However, divorce settlements might mandate maintaining life insurance with the couple’s child or the spouse receiving spousal or child support as the beneficiary. This ensures that funds are available to fulfill these obligations if the supporting spouse passes away.

Life Insurance Relevance Post-Divorce

Divorce often transforms couples into single parents responsible for their children’s well-being. In this context, life insurance plays a critical role in providing financial protection for the future. It helps safeguard their interests by offering funds for various needs, including:

  • Meeting daily living expenses
  • Clearing debts
  • Retaining the family home
  • Financing education

Even if dependents are no longer a concern post-divorce, there are still valid reasons to consider life insurance:

  • Covering debts and final expenses
  • Leaving a legacy for family members or charitable causes

What’s the Next Step?

Armed with a deeper comprehension of how life insurance intersects with divorce, consider consulting an advisor. If you’re affiliated with Canada Life’s workplace benefits, connecting with a health and wealth consultant can help you:

  1. Determine the type of life insurance you hold
  2. Evaluate your optimal life insurance coverage
  3. Explore the necessity of additional insurance, such as critical illness or disability coverage


  • The cash value in permanent life insurance may be considered as matrimonial property to be divided or equalized between the spouses.
  • Depending on your situation, you may decide to change the beneficiary on your life insurance policy after divorce.
  • There are many good reasons to have life insurance after your divorce.

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