Ex-Spouse Still Controls the Life Insurance Policy — What Can Go Wrong

Divorce agreements often require life insurance to protect children, support obligations, or financial settlements. But many agreements fail to address one critical issue:

Who actually controls the policy after the divorce.

When an ex-spouse retains ownership or control of a life insurance policy, the protection the court intended may be far weaker than it appears.

Why Policy Control Matters More Than Most People Realize

Life insurance is governed by contract law. The policy owner—not the divorce judgment—usually controls:

  • Beneficiary changes

  • Premium payments

  • Loans or withdrawals

  • Policy cancellations or lapses

If a former spouse still controls the policy, they may be able to undermine the divorce order without immediate consequences.

How This Situation Commonly Arises

This issue often appears when:

  • The policy existed before the divorce

  • The agreement requires insurance but does not transfer ownership

  • Parties assume beneficiary designation alone is sufficient

  • Courts do not address ongoing monitoring or enforcement

On paper, the divorce order looks protective. In practice, control remains with the person whose interests may no longer align with the agreement.

What Can Go Wrong When an Ex-Spouse Controls the Policy

1. Beneficiaries Are Changed Quietly

Even when a divorce agreement prohibits changes, insurers typically follow the most recent beneficiary designation on file. Unauthorized changes are often discovered only after death.

2. Coverage Is Reduced or Borrowed Against

Policy owners may take loans, reduce face value, or otherwise diminish the benefit—leaving far less than the court intended.

3. Premiums Stop and the Policy Lapses

Missed payments, job changes, or policy conversions can terminate coverage entirely. Lapses often occur without notice to the protected party.

4. Enforcement After Death Becomes Uncertain

After the insured dies, courts may struggle to unwind policy changes or reconstruct lost coverage, especially if beneficiaries or insurers acted in good faith.

Why Divorce Orders Alone May Not Be Enough

Family courts do not administer life insurance policies, and insurers are not responsible for enforcing divorce judgments.

Even when a divorce agreement is clear:

  • Insurers pay according to the policy

  • Ownership controls decision-making

  • Courts may lack effective remedies after death

This disconnect is one of the most common reasons court-ordered life insurance fails.

The Risk of Time and Changed Circumstances

Years often pass between divorce and death. During that time:

  • Relationships change

  • Financial pressures arise

  • New spouses or children enter the picture

  • Policies are modified or replaced

The longer an ex-spouse retains control, the greater the risk that the original intent of the divorce will not be honored.

How These Risks Can Be Addressed Proactively

Effective planning focuses on control, not just coverage.

Key issues to evaluate include:

  • Whether ownership should be transferred

  • Whether beneficiary designations are durable and enforceable

  • How compliance will be monitored over time

  • How to protect against lapse, reduction, or unauthorized changes

These are legal and strategic questions that must be addressed alongside the divorce agreement—not left to chance.

Divorce Life Insurance Strategy Session

A Divorce Life Insurance Strategy Session is designed to identify and address risks that arise when an ex-spouse still controls a policy.

This flat-fee consultation can:

  • Review existing policies and ownership structure

  • Analyze divorce agreements for enforcement gaps

  • Identify risks related to beneficiary control and lapse

  • Provide guidance on securing and protecting financial interests

  • Help prevent disputes that often surface years later

The goal is to ensure that life insurance required in divorce actually functions as intended.

Why Addressing Control Early Matters

Once a policy is changed, reduced, or allowed to lapse:

  • Recovery may be impossible

  • Litigation becomes complex and expensive

  • Intended beneficiaries may receive nothing

Addressing control issues early is one of the most effective ways to prevent future conflict and financial loss.

Schedule a Divorce Life Insurance Strategy Session

Going through a divorce and concerned that your ex-spouse still controls the life insurance policy? A preventive review can help identify risks and provide clear guidance before problems arise.

👉 Schedule a Divorce Life Insurance Strategy Session

***This service provides legal analysis and planning regarding life insurance issues in divorce. It does not involve the sale of insurance products.