Getting a Divorce: What Happens to Your Joint Insurance Policy?

a couple arguing in front of a lawyerThe entire process of getting a divorce could take months to finish, and often, divorcing couples find it extremely hard to work with each other through issues during this time. For instance, some spouses want to cancel or modify their joint insurance policy during the divorce proceedings since they want to change beneficiaries or don’t want to keep paying for it. While laws differ from one state to another, it’s illegal in most states to cancel joint insurance policies or modify them until the divorce has been finalized.

General court rules on joint insurance policies​

Some states prohibit the cancellation of a joint insurance policy when a divorce is pending. For instance, some states require that divorcing couples file their divorce pleadings along with a certification stating that they didn’t change their insurance within a predetermined time frame before filing for divorce, explains a top divorce attorney in Lynnwood.

Likewise, in some states, once a spouse files divorce, the court would send out automatic restraining orders to keep divorcing couples from conducting specific administrative or financial actions, but not physical contact as is with common restraining orders. While the specific language in the orders differs, they typically include issues with assets, including insurance policies such as health and life insurance.

Also, select life insurance plans have cash value, and courts usually consider this as marital property. This means that it would be up to the court to divide it during the divorce.

What about after the divorce?​

It’s usually up to the divorced couple whether to continue their joint insurance policies. In some cases though, the court might order them to continue or get separate life insurance policies post-divorce. The insurance plan could help the paying spouse with child support and alimony payments, as well as provide a financial cushion in the event of the paying spouse passes away. However, if the paying spouse terminates a court-order insurance plan after divorcing, the receiving spouse could get help from the court to reinforce it.