More than 40% of all marriages in the UK end in divorce, according to the Office of National Statistics. And dealing with a life insurance policy (or policies) is an important part of it.
A lot of couples decide to take out a joint insurance policy (something I would not advise you to do, more about this tip can be found in our Life Insurance Tips&Tricks section), and when we talk about divorce, this could be a problem. Having a single term life insurance policy can save you lots of trouble, but not in the case of a divorce. If we include children in this equation and maybe some debts like the mortgage, this might even complicate the process.
So what happens with your life insurance policy after divorce, and how to proceed if it happens? How many problems this will result in and how complex this transition may be, depends on various factors, some of which are explained below. So, what happens with life insurance contract after divorce?
Divorce With a Single Policy
If you and your partner have two individual life insurance policies, this will make things a little easier in the event of a divorce. However, you should check to make sure that your policy still provides the financial coverage you need in your new situation. You may also consider changing your life insurance beneficiaries before, during, or after a divorce if you no longer want your ex-partner to receive your life insurance benefits. Most policies allow you to do that at any time, but just to be sure, check with your insurance provider.
Divorce With a Joint Policy
Some insurance providers allow you to split one joint policy into two, so first, check that with your insurer or agent. If it is possible, it will save you lots of trouble, but most insurance companies do not offer this option. In that case, I would recommend either of the two options described below:
- You can terminate the contract and sign a new, single life insurance contract that adapts to your new circumstances. However, I must warn you that there are potential downsides to this. The premiums will likely be higher because you'll be older now than you were when you bought the original policy, and you may need to pass a health check before a new policy is approved. You may want to check if your new policy applies before cancelling any existing coverage. Ultimately, any new policy will be subject to the terms and conditions that were available to you at the time you made the change.
- One of you takes over the policy, while the other creates a new policy if they still need life insurance. You should check your existing policy to see if this is an option.

Divorce With Life Insurance as a Mortgage Protection
If your life insurance offers coverage to help protect a mortgage, after the divorce settlement, the acquirer can either take over the existing life insurance policy or purchase a new one. You may want to look at the existing insurance to make sure it still provides enough financial coverage to pay off the mortgage should you pass away during the term of the policy. This is also a good time to consider who the legal beneficiaries of the policy are, to ensure that the mortgage is paid off in the event of a claim.
How Much Life Insurance Is Needed After a Divorce?
The payment on your insurance policy should be sufficient to replace your income so that minors can be financially protected. Bear in mind that you need to calculate how many years your youngest child has left before they turn 18 years old, and then multiply this number by your annual income. If you want more benefits and can pay premiums, count the years to a minimum of 21. Older people with joint care need to know what gives their children the greatest protection. And for a non-custodial parent whose ex-spouse provides care and/or financial support, it would also be wise to have life insurance in the event of the other parent's death.


An advice from Genius James
Change your existing will as you probably don’t want your ex to be the beneficiary of your inheritance.