Life Insurance: Reaffirming Your Beneficiaries
BEWARE: YOU MAY NOT REALLY BE THE BENEFICIARY OF YOUR EX’S LIFE INSURANCE POLICY
Effective July 1, 2012, you are not considered the beneficiary of your ex spouse’s life insurance policy even if you are named as the beneficiary, UNLESS your ex spouse reaffirms you as the beneficiary after the divorce decree has been entered.
This change in the law is extremely critical since it is to be applied retroactively. So, if you are divorced and your divorce decree provides that you are to be the beneficiary of a life insurance policy to secure child support or spousal support payments, you MUST get your ex spouse to reaffirm with the insurance carrier that you are to continue to be the beneficiary. Unless this happens, the life insurance company does not have to recognize you as the beneficiary. It doesn’t matter when you got divorced.
The new law also states that you have NO legal recourse against the life insurance company if it pays the wrong beneficiary. Therefore, even if your ex reaffirms you as the beneficiary and the life insurance company pays a different beneficiary instead of you, you will NOT win a lawsuit against the company for paying the wrong beneficiary.
This means that everyone who is the beneficiary of a life insurance policy to secure child support or alimony payments MUST get their ex spouse to reaffirm them as the beneficiary of that policy. It also means that if your ex dies, you should immediately make a demand for the proceeds of the life insurance policy and keep on top of the company to make sure it doesn’t wrongfully pay someone else.
Also, if you are currently going through a divorce and your spouse has agreed to take out a life insurance policy with you as the beneficiary, your divorce agreement should contain a provision requiring your spouse to reaffirm you as the beneficiary within a certain amount of time after entry of the final judgment of divorce.
Life insurance proceeds provide the source of support for many people after an ex spouse dies. And this law could affect many lives. If you are divorced and your ex spouse is supposed to maintain a life insurance policy for your benefit, BE SURE to require a reaffirmation be sent to the life insurance company, reaffirming you as the beneficiary. Failure to do so could result in a substantial loss of funds!