Is it better to get single or joint life insurance?

Which option is best for you will largely depend on your needs and your budget. A joint life insurance policy is often taken out by couples to help protect shared assets, such as: A mortgage Family living costs Shared debts A pay out from a joint life insurance policy can help the surviving partner to cover these large expenses and relieve them of any financial stress. Securing a joint life insurance policy can also help you to save money as you’ll only need to pay one premium to cover two lives. However, as a result, there will only be one pay out. This is typically after the first death. This means that if one partner were to pass away, the other partner would be left needing to find new cover at an older age. Complications can arise if you divorce or separate from your partner, as detailed in this article. Taking out two single policies may be more expensive but it can have its benefits. Each partner will have their own policy, meaning there will be two pay outs upon the passing of each policyholder. If you have dependants this can be extremely beneficial as two policies could provide them with a greater pay out amount.

Joint Life Insurance after Divorce » What are my options?

Q: Is life insurance considered marital property?

No, a life insurance policy is not marital property. In the event of a divorce, you and your ex-partner will need to come to a mutual decision about what to do with the policy otherwise it will simply stay in place until the end of the term.

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Joint life insurance after divorce

Joint life insurance policy after divorce
What happens to life insurance after a divorce?
Cancelling a joint life insurance policy
Setting up a new life insurance policy
Is life insurance still valid after divorce?
Life insurance beneficiary after divorce
Can husband keep wife on life insurance after divorce?
Can an ex-spouse collect life insurance?
Is life insurance considered marital property?

Joint life insurance policy after divorce

Unfortunately, divorce and separations happen, but what impact will this have on your life insurance policy?

If you and your partner have both taken out single policies, the effects of a divorce will be minimal.

But with 40% of all policies being joint policies^[1], what happens then? Will the cover remain in place or will you need to cancel your life insurance?

The options available to you will depend on the terms of your policy. Some policies include a ‘separation benefit’, but this isn’t offered by every insurer.

If you find yourself in a position where you need to secure a new policy, Reassured can help you to compare multiple quotes from some of the UK's leading providers.

Keep reading to find out everything you need to know about joint life insurance after divorce…

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What happens to life insurance after a divorce?

Deciding what to do with your joint life insurance policy after a divorce is completely up to you and your ex-partner.

There are typically three main options available to those with a joint policy who are going through a divorce:

One party takes over the existing policy and the other party takes out a new policy
The joint policy is split into two single policies (not available with all policies)
The policy is cancelled and both parties find new cover

Taking over the policy

You’ll need to come to a mutual agreement with your ex-spouse about who’ll take over the policy.

The policy will then be signed over to the chosen party through a legal document.

Whoever takes over the policy will be responsible for paying the monthly premium.

They’ll also be able to choose new beneficiaries if their ex-partner is named as a beneficiary.

Please note, that not all providers will offer this option.

Split the policy

In some cases, it’s possible to split a joint life insurance policy into two single policies in the event of a separation.

This is a known as a ‘separation benefit’ or ‘separation agreement’.

It allows you to easily split the policy without having to provide any new medical information.

When using this benefit, you’ll need to provide evidence of your divorce or separation – usually within a specified time frame.

Please note, not all insurers offer this option. To find out if your joint policy has this benefit, you can check the terms and conditions of your policy or contact your insurer.

Cancelling the policy

Alternatively, if an agreement can’t be made over who’ll take over the policy or the separation benefit is not available, you have the option of cancelling the policy.

Once the policy has been cancelled, both parties will then be able to take out their own life cover.

New policies can accommodate any changes in your financial obligations as a result of the divorce.

However, you may experience higher premiums due to older age and having to provide new medical information.

If you find yourself needing new cover, comparing quotes is essential to securing a policy that meets all of your needs at a price that’s within your new budget.

At Reassured we can compare quotes from some of the UK's leading insurers to find you our best deal.

Cancelling a joint life insurance policy

If you’ve explored all other options and decide that cancelling your joint life insurance policy is the best route, you can do this by contacting your provider directly.

You shouldn’t be charged a cancellation fee, but all the premiums you’ve paid in won’t be refunded.

Once you’ve cancelled your policy you may wish to arrange new life insurance if it’s still needed, for example, to protect your children.

Setting up a new life insurance policy

Getting a divorce may bring about some big life changes.

These life changes may have an impact on your financial obligations and it’s likely the amount of cover you require after a divorce may be different to when you were married.

If you’re cancelling your joint policy and are looking to take out a new policy, it’s likely your provider will try and persuade you to take out a single policy directly with them.

However, this may not be the most cost-effective solution.

Comparing quotes from various providers is essential to securing a suitable policy for your new circumstances.

At Reassured we can compare quotes from some of the UK's leading providers and present you with our best deals.

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Is life insurance still valid after divorce?

Yes, a joint life insurance policy is still valid after a divorce.

Unless you choose to cancel the policy, your cover will remain in place until the end of the term.

You’re not legally obligated to inform your insurer of your divorce, however, it’s best to do so to find out what options are available to you regarding your policy.

Mortgage life insurance after divorce

Often a joint life insurance policy is taken out by couples to help protect a shared mortgage.

If one partner were to pass away, the surviving partner may struggle to continue making mortgage payments.

A life insurance policy is typically taken out to help ensure the surviving partner can remain in their home.

When going through a divorce you may decide to sell the house and you and your ex may find new places to live.

In this case, it’s likely you may want to cancel your life insurance policy and take out new cover to protect your new living situation.

Alternatively, you may come to an agreement for one of you to remain in the house.

In this case, you could choose to sign the policy over to the party who has taken over the mortgage.

If you’re looking for new life cover to protect your new home, Reassured can compare quotes from multiple providers to find you suitable cover.

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Life insurance beneficiary after divorce

With a joint life insurance policy, it’s likely that each spouse would have named each other as a beneficiary as a way of protecting shared assets.

However, if you’re going through a divorce, it’s likely you’ll no longer want your ex-spouse as a named beneficiary.

If you’ve made the decision to cancel the policy, this won't be an issue as you can take out a new policy and name whoever you’d like to benefit from your life insurance pay out.

However, if you’ve taken over the joint life insurance policy, you’ll need to contact your provider.

They’ll be able to provide information about the process of changing your beneficiary.

If you’ve written your life insurance in trust, this may cause some complications.

If the policy was written in an absolute trust, it’s unlikely you’ll be able to change the beneficiary on the policy.

If the policy was written in flexible or discretionary trust, it’s likely you’ll be able to make the necessary changes to the policy.

Can husband keep wife on life insurance after divorce?

Unless you choose to change the named beneficiary on the policy, your ex-spouse will remain as the named beneficiary.

This means they'll benefit from your pay out if you were to pass away while the policy is active.

Can an ex-spouse collect life insurance?

If you choose to keep your joint life insurance policy after a divorce and your ex is still listed as a named beneficiary, they’ll be able to make a claim on the policy after your passing, (if you pass away during the term).

This means they’ll receive the lump sum pay out from the policy.

It’s important to contact your provider when going through a divorce as they’ll be able to provide you with all your options regarding your joint policy.

This means you can cancel the policy or make any necessary changes to your named beneficiaries.

Is life insurance considered marital property?

No, a life insurance policy is not marital property.

In the event of a divorce, you and your ex-partner will need to come to a mutual decision about what to do with the policy otherwise it will simply stay in place until the end of the term.

Divorce statistics UK

The divorce rate in the UK is estimated to be 42%
‘Unreasonable behaviour’ is the most common reason for divorce
The average age for divorce in the UK is 43.9 for women and 46.4 for men
The average length of a marriage before divorce is estimated to be 11.9 years^[2]