Life Insurance After Divorce: What If Your Ex Dies?

Part of: Financial Settlement after Divorce

Life insurance after divorce is how you protect maintenance that would otherwise stop on the day your former partner dies. A spousal maintenance order ends on the death of either of you, and a Child Maintenance Service calculation ends when the paying parent dies. A policy on your ex’s life, written into the financial order as a promise to the court, can pay out what those payments would have provided. This guide explains how life insurance and divorce fit together in England and Wales: putting cover into a consent order, deciding what happens to a joint policy, and using pension death benefits.

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What happens to maintenance if your ex dies?

It stops. A spousal periodical payments order cannot run beyond the death of either of you, or beyond the remarriage of the person receiving it (MCA 1973, s.28(1)(a)). Child maintenance worked out by the Child Maintenance Service ends in the same way, because the calculation ceases on the death of the paying parent (Child Support Act 1991, Schedule 1, para 16).

The standard wording of a financial order says so plainly. Payments end on the first of three events: the death of either of you, the remarriage of the person receiving them, or a set date. If your household budget rests on those payments, their end is a risk you can insure against. If your ex dies while payments are still due, a policy pays a lump sum in their place.

Can the court order life insurance after divorce?

Not as a freestanding order. The main orders the court can make on divorce are periodical payments, secured periodical payments and lump sums (MCA 1973, s.23), and orders transferring or settling property (s.24). An order to buy a new life policy is not among them. So you agree the cover between you, and the order records it as an undertaking, which is a formal promise to the court.

The judiciary publishes standard wording for financial remedy orders (Order 2.1). It includes several undertakings about life cover:

• Take out and maintain a policy. The paying party insures their own life for an agreed sum and term, for the benefit of the other party, the children or both. They pay every premium and give written evidence that the policy is in place.
• Take out and assign a policy. The paying party takes out the policy and assigns it outright to the other party, who then pays the premiums.
• Let the insurer talk to you. The paying party authorises the insurer to give you information about the policy for as long as you are entitled to its benefits.
• Attend a medical. The paying party agrees to any medical examination an insurer requires, so that you can insure their life yourself.

The same template lets the sum insured fall in a straight line to nothing by the end of the term. Alternatively, the policy can pay an index-linked yearly amount until the maintenance would have ended. Either way, the cover tracks what you actually stand to lose.

What about a policy you already hold?

The court can deal with policies that already exist. A policy is property, so the court can order one spouse to transfer their interest in it to the other (s.24(1)(a)). An undertaking carries real weight too. The standard order warns that anyone who breaks a promise to the court may be held in contempt and imprisoned or fined, or have their assets seized. Our guide to the financial consent order explains how agreed terms become binding.

How much life insurance after divorce would replace the maintenance?

Work through three steps: what would stop, roughly how much and for how long, and what cover exists today. You will see the sum at stake and the clauses that would protect it. Nothing you enter is saved or sent anywhere.

Who should own the policy: your ex, a trust or you?

Ownership decides who controls the cover, and who finds out first if it lapses. The standard order supports three set-ups.

• Your ex owns it, for your benefit. They take out a policy on their own life for you or the children and keep paying for it. You rely on their undertaking and the yearly evidence to know it is still in force.
• Your ex takes it out, then assigns it to you. The policy becomes yours. You pay the premiums, so you always know whether it is in force, and the decision to keep it going rests with you.
• You insure your ex’s life yourself. You own and pay for the policy. The person taking out a policy must have an interest in the life insured, or the policy is void, and no more can be recovered than the value of that interest (Life Assurance Act 1774, ss.1 and 3). Your ex’s undertaking to attend a medical makes the application possible.

Where a policy pays into a trust, the money stays outside the insured person’s estate. A policy a person takes out on their own life, expressed to be for the benefit of their spouse or children, creates a trust in their favour. The proceeds then do not form part of the insured person’s estate and are not available for their debts (Married Women’s Property Act 1882, s.11). That keeps the payout away from your ex’s creditors and out of their will.

What happens to a joint life insurance policy in a divorce?

Nothing automatic. The rule that removes a former spouse from a will when the marriage ends applies to wills (Wills Act 1837, s.18A). A joint policy carries on as written until the two of you decide what to do with it, and the premiums stay due in the meantime.

Start with the policy schedule. Look at whose lives it covers, whether it pays on the first death only, who receives the money, whether it sits in a trust, and whether it has a surrender value. Form E asks for every life insurance and endowment policy you hold or have an interest in, including those with no surrender value, and for a surrender valuation of any that has one (Form E, section 2.5). Our guide to Form E explains the rest of the form.

The standard order then offers three ways to deal with an existing policy:

• Keep it to maturity. For a policy that matures, you both keep it going, share the premiums in agreed proportions and divide the proceeds when it pays out.
• Surrender it. Cash it in, or sell it for no less than its surrender value, and split what it raises.
• Transfer it. One of you assigns their interest to the other, who takes it over.

If the joint policy was protecting a mortgage, decide it alongside the family home. Our guide to financial settlement after divorce sets out how the court divides the home and other assets.

Can death-in-service and pension benefits protect the maintenance?

Yes. If your ex’s pension would pay a lump sum on their death, the court has specific powers over it. When it orders a lump sum, it can require the scheme to pay all or part of that death benefit to the former spouse, or require the member to nominate them for it (MCA 1973, s.25C). The court cannot use these powers on a pension that you are sharing (s.25C(4)). Our guide to the pension sharing order explains sharing.

The standard order also has a simpler undertaking. The employee nominates the former spouse for a share of their death-in-service benefit, if needed capped at a multiple of the yearly maintenance. The nomination lasts until the maintenance ends or the receiving party remarries. A scheme pays death-in-service benefit only if your ex dies while still in that employment, so a new job or retirement can end it. A life policy does not depend on their employer, which is why the two often work as layers.

Your own nominations matter as well. Divorce does not change who a pension nomination or a policy in trust would pay. Our guide to whether divorce revokes a will covers what passes outside your will.

Asked to provide life insurance after divorce? What to check first

If you pay the maintenance, a request for cover is a reasonable one, but the detail decides what it costs you. Before you give the promise, look at these points.

• The term. Cover should end when the payments it protects end. The standard wording ties it to the maintenance order, to the other party’s death or remarriage, or to the children reaching 18 or leaving secondary education.
• The sum. A decreasing policy falls in step with the payments still due, so you are not paying to insure money you no longer owe.
• Whether you can get cover at all. If your age or health could make cover hard to find, the template allows a promise to try to obtain it, rather than an absolute promise to succeed.
• Who pays the premiums. If the policy is assigned to your ex, they pay. If you keep it, you pay and must show proof of cover.
• What it adds to your outgoings. Premiums come out of the same income as the maintenance, so build them into what you can afford.

The court can enforce an undertaking like an order, so promise only what you can keep up. Our page on spousal maintenance explains how the court sets the payments themselves.

What if your ex dies and there is no life cover?

You may still have a claim, but it is slower and less certain. A former spouse who has not remarried or formed a civil partnership can ask the court for reasonable financial provision from the estate (Inheritance (Provision for Family and Dependants) Act 1975, s.1(1)(b)). A financial order can close that route. The court can order that neither of you may bring that claim on the other’s death (s.15), and the standard clean break wording includes that bar. Other orders keep the claim open but limit it to compensating for the lost maintenance.

Secured maintenance is the other route. A fund or property set aside for the purpose backs a secured periodical payments order. The payer’s death does not end it, and it runs until the death or remarriage of the person receiving it (s.28(1)(b)). It needs capital that can be tied up for years. An estate claim means court proceedings against your ex’s family at a hard time, while a policy pays out without either.

Life insurance and divorce: frequently asked questions

General information about the law in England and Wales, not advice on your circumstances.