Fact CheckedCan You Get Life Insurance On An Ex Spouse? This question reminds me of a creepy late-night movie.
So, before we get started – this is not as dark of a topic as it may seem.
…and let’s be clear, there are VERY legitimate reasons why someone would buy a policy on their ex.
The simple answer to this question is YES, with your ex’s consent. But there is more to this than meets the eye.
Let’s explore this topic now!
Who Am I & Why I Started This Blog
My name is James Heidebrecht, and I’m the founder of Policy Architects, a small boutique life insurance agency.
I started this blog to provide user-friendly information for people like me. It was difficult to wade through all the noise when looking for my first life insurance policy.
As a 55-year-old man, I know just how confusing it can all be. With such a crowded playing field, it’s tough for those who want to deal with a real person, not technology, to find clear answers.
I aim to provide consumers with information BEFORE speaking to an agent. Being prepared saves time, money, and headaches down the line.
With no further delay – let’s get on with the show.
Can You Get Life Insurance On An Ex-Spouse?
First of All, WHY Would You Even Want To?
If you are Googling this, I guess you are divorced with shared custody of a child. This is the situation for almost all the clients I work with who have gone through this process.
Divorce is not as simple as we are led to believe. When you share time with a child, it can all get pretty complicated.
Everyone’s situation is different. For example, let’s say my client is a stay-at-home mom. She is 40 years old and gets child support and alimony. Her ex-husband’s contribution to her household is substantial, and without her monthly check, she could not maintain her lifestyle or home.
So what happens if her ex suddenly dies?
“…Dealing with life insurance is an important part of the divorce process. This is especially true for divorcing couples with children. Keeping life insurance in order protects the financial interests of both parties and their dependent children. This process involves making necessary beneficiary changes, accounting for the cash value in whole or universal life policies, protecting child support and alimony income, and, most importantly, ensuring that any children involved are financially protected, no matter what.”
OUCH!
I’ll tell you what. She would go bankrupt. That’s where a good life insurance policy comes in handy. There are a couple of ways of doing this:
- Take a policy out on your ex. with you as the owner and beneficiary and him or her as the insured. They will have to either consent to a medical exam for a traditional policy OR sign for a no-medical exam policy. Depending on your agreement, you can also be the payor on the policy.
- Your ex can take out his or her policy and make you their irrevocable beneficiary. You are both the owner and the insured when you remove your policy.
This is one of the most important things to remember when you get a divorce. Even if you are not receiving financial help through alimony or child support, time is money.
Your ex is likely helping out a lot more than you know. What happens when your child becomes your sole responsibility? All of the expense splitting goes by the wayside.
My best advice? Get honest about your contributions and make a coverage plan.
Remember You Must Have An Insurable Interest
If you want to take out a life insurance policy on your ex-spouse, you must have an insurable interest.
Financial obligations connected to shared custody fall clearly into this category.
Another instance that fits into this category is a business partnership. I know individuals who initiated a business together while married but later separated personally to preserve their business connections.
Coverage would be helpful here, especially if you want to keep your business going.
There may be other situations, but you cannot take out a policy if you have no financial interest in your ex. This is to dissuade the aforementioned creepy scenarios from unfolding.
What Sort of Life Insurance Coverage Should You Select In This Situation
The type of life insurance you choose is an important part of the equation. Remember, term coverage is temporary coverage when you are most vulnerable.
There is no guarantee that your beneficiary will receive a payout, so the premiums are far more affordable.
I would recommend term coverage for a divorce scenario because the need is temporary. When your child grows up and leaves home, the need for coverage ends.
For a business scenario, this may be different. As the business evolves, the need for coverage may decrease, but if your partner/ex plays a key role, a permanent policy may be better.
Remember, permanent life insurance provides coverage until the day you die, so there is a guaranteed payout.
This is why it is so important to speak to an independent life insurance agent. We know all the products’ ins and outs and will help you select the best option for your budget.
Be Sure to Get Adequate Coverage, and Remember NOT All Companies Are Created Equal
A lot of clients aren’t honest about their needs. A financial analysis helps clients get real.
Remember, time is money. While you may think $250K will cover it, it probably won’t. These large figures throw people off because they represent more cash than most of us will ever see at one point in our lives.
The problem is that the money will be spread over some time (think years), and there is no safety net once it’s gone.
Another big consideration is selecting the right insurer for your particular medical situation. Carriers niche down, and some are much more lenient than others regarding specific health issues. This is why you need an agent who keeps up with the most current underwriting changes from company to company.
Why You Need to Call Policy Architects Today
Can You Get Life Insurance On An Ex-Spouse? You sure can, as long as there is a financial need AND they consent.
Whether you get traditionally underwritten (with a medical exam) insurance or no medical coverage – the person you are looking to insure needs to sign on (literally). Taking out a policy without their knowledge is illegal.
That said, if you’re divorced or separated – but are still financially reliant in some way on your ex – life insurance is a terrific tool to make sure their death doesn’t negatively impact your bottom line.
Call us today if you want more information about life insurance and your ex. We work with Canada’s best life insurance companies and can help you sift through your options. Calling us today can save you time, money, and hassle.
