Life Insurance and Divorce: What You Need to Know

Divorce can be one of life’s most difficult transitions. It marks the end of a chapter and the beginning of a new one. For military families, it can be even more complex. From navigating TRICARE coverage to retirement benefits, there’s a lot to manage when it comes to untangling your lives.

But there’s one critical detail you don’t want to overlook: your life insurance policy.

Why Life Insurance Deserves Your Attention During Divorce

Military service members often name their spouse as their beneficiary when they first purchase coverage. But after a divorce, that may no longer reflect your wishes.

You may have new priorities: children from the marriage, a new spouse, or different financial obligations. Failing to update your policy could mean your ex-spouse unintentionally receives your life insurance benefit.

Fortunately, you have the power to update your policy, but you need to act.

How to Change Your Life Insurance Beneficiary After Divorce

Changing your life insurance beneficiary from your ex-spouse might be overwhelming at first. We have created a straightforward checklist to guide you through the process:

1. Review Your Current Policy

   Start by checking your existing policy. Look at the following:
   
   • Is this the right policy for my current situation?
   • Do I have the right coverage amount?
   • Who is my primary beneficiary?
   • Do I have a contingent beneficiary, and if so, who is it? (Who receives the benefit if the primary can’t?)
     
     
   Make sure this information reflects your current family needs and financial priorities.
   
   

2. Update the Beneficiary Designation

   Once you know who you want to designate, submit a beneficiary change form. This process is typically simple, and our USBA^® Member Service team can walk you through the necessary steps.
   
   You can name:
   • A new spouse
   • Children or stepchildren
   • A trust (especially if minors are involved)
   • A relative or other dependent
   
   
   Be sure to fill out the form accurately. Incorrect or incomplete info can delay the claim process later down the line—or even result in legal disputes.
   
   

3. Align With Legal Agreements

   Your divorce decree may include specific clauses regarding life insurance and child support or alimony. For example:
   • You may be required to keep a certain level of coverage for your ex-spouse.
   • You might need to maintain your children as beneficiaries until a certain age.
     
     
   If that’s the case, make sure your policy complies with the decree. Your attorney or financial advisor can help you align your legal and insurance documents.
   
   

4. Communicate Your Changes

   Let your updated beneficiary know they’ve been added, and where to find your policy documentation in case the need arises. This helps eliminate surprises or confusion in the future. If you’re naming a trust, make sure it’s set up and managed by someone you trust.
   
   If you’d like to learn more, check out our blog How Veterans Can Choose the Right Life Insurance Beneficiary.
   

What Is Beneficiary Revocation—and Does It Apply to You?

You may have heard that some states automatically revoke a former spouse as the beneficiary after a divorce. This is known as revocation by operation of law, and while it can be helpful, it’s not something you should rely on without understanding how it works.

So, what is beneficiary revocation?

In simple terms, revocation laws in certain states automatically cancel an ex-spouse’s right to receive your life insurance proceeds after divorce, but only under certain conditions.

Here’s what you need to know:

• These laws vary by state. Not all states have revocation statutes, and the rules diffeer in the states that do.
• They may not apply to federal or military-affiliated policies. For example, revocation laws generally don’t override designations on policies like Servicemembers’ Group Life Insurance (SGLI).
• They require proper documentation. If you fail to formally update your beneficiary, your insurer might still pay the person listed on file, even if a state revokes their rights.

Bottom line: Relying on revocation laws can create confusion or even lead to court battles between surviving family members. It’s always better to take action yourself and submit a beneficiary update directly to your insurance provider.

Take Action: Update and Protect What Matters Most

Amid divorce, it’s easy to overlook paperwork like life insurance. But making this small update can have a major impact.

At The Uniformed Services Benefit Association^® (USBA^®), we offer term life insurance specifically designed for the needs of service members, veterans, and their families as they navigate life’s many changes. Our policies are designed to adapt to you, no matter what.

By reviewing your policy, updating your beneficiary, and ensuring your coverage reflects your current responsibilities, you’re giving yourself and your loved ones peace of mind.

Need Help Navigating Life Insurance and Divorce?

If you’d like help navigating life insurance and divorce, then feel free to contact one of our product specialists at 800-368-7021 or email us at USBAmemb@usba.com.