In general, any life insurance policy you or your former spouse have will remain in effect as is. Divorce may not change that. However, you might want to look at your policy and make changes. Some of these changes may include updating coverage, starting a new policy or changing your beneficiaries.
Currently, about 23 states, including California, have statutes requiring revocation of non-probate asset beneficiary designation upon divorce, meaning that upon divorce, ex-spouses are automatically removed as beneficiaries on such assets as a matter of law.
In most cases, the insurance companies will not allow you to be continued to be covered by your ex-husband's health insurance after divorce. However, you may still be able to be covered under COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985).
Life Insurance Purchased During Marriage in One Party's Name is Community Property in a Divorce. California is a community property state. That means that all property acquired during a marriage is presumed to be community property.
If you do not name a beneficiary, The Standard will pay the life benefit according to the “policy order.” This means your surviving spouse will be paid the benefit as the first person listed in the order.
If you have a permanent life insurance policy with a cash value component, it may be considered a marital asset and subject to division by the court like all your other marital property. In some cases, you and your ex may be able to cancel the policy and split the cash value or access it in another way.
Separation and divorce can affect your insurance if you and your spouse share policies for your home, cars, health, life, or disability. If your cars are kept at separate residences, you need separate auto policies. If you don't already have your own health insurance, you'll need to find a provider once you divorce.
The Working Spouse Rule means a spouse of an employee may not use our health insurance plan as the primary coverage if the spouse works, is eligible for health insurance coverage through his/her employer, and the employer pays at least 50% of the total premium for “employee only” or single coverage.
Why do you need to tell your boss about your divorce? While it isn't required, it's likely that you will need to make changes to your health care plan, your tax status, and other human resources paperwork.
A will cannot override a beneficiary designation because the policy is a contract between the person who purchases it and the issuer. The only way anyone can override a beneficiary other than the policyholder is if a court determines there's a conflict between named beneficiaries and state laws.
Search with the National Association of Insurance Commissioners (NAIC): NAIC has an online Life Insurance Policy Locator Service that uses the deceased's name to search the records of participating life insurance companies. This service is free, confidential, and easy to use.
So the answer is no, unless the beneficiary is changed, that is who will receive the money upon the account owner's death, regardless of a divorce. In many divorces, savings accounts and retirement accounts are divided as part of the separation agreement.
Marital status typically does not affect life insurance rates, as rates are based on factors like age, gender and medical history. Life insurance policies are affected by marital status, however, when the policyholder is newly married or recently divorced.
A life insurance beneficiary designation usually overrides a current spouse or a will. Spouses in community property states must split the death benefit with the named beneficiary. Review (and update) your beneficiaries any time your situation changes.
A spousal carve out is a health insurance plan design employers use to control health care costs by placing restrictions on coverage for an employee's spouse. Another term used for this type of plan design is the "working spouse rule." Employers commonly use several spousal carve out design variations.
What is Married Filing Jointly? Married taxpayers who choose to file a joint return will use one return to report their combined income and to deduct combined allowable expenses. Married taxpayers can select this status even if one of the spouses did not have any income or any deductions.
The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit.
Typically, you can't keep life insurance on your ex-spouse. This is because many states believe that you don't have an insurable interest in your ex anymore.
Although your kids can stay covered under your spouse's plan, you most likely cannot if you are not the policyholder. Once the divorce is finalized, you won't be considered a family member anymore and won't be covered on the plan, says Katz. You'll have to find new insurance coverage and pay your own premium.
Life insurance is not always required or included in a divorce settlement. However, it can play an important role in your post-divorce financial security, especially if there are children involved.
In order to count life-insurance premiums as alimony a few things have to happen. First of all, there must be a court order that states one is responsible for maintaining such a policy. Second, the receiving spouse would have to count the premiums as taxable income on his or her taxes.
Joint life insurance policies
With first-to-die joint life insurance, the surviving spouse will collect the death benefit after the first spouse dies. A second-to-die or survivorship policy is when the beneficiaries receive the death benefit once both spouses pass away.
For example, California law (Probate Code § 6122) states that: "Unless the will expressly provides otherwise, if after executing a will the testator's marriage is dissolved or annulled, the dissolution or annulment revokes … any disposition or appointment of property made by the will to the former spouse."