Imagine spending years paying premiums on a $250,000 life insurance policy, believing the money will eventually help your children or current spouse. Then, after your death, your family discovers something unexpected: your ex-spouse from a marriage that ended 15 years ago is still listed as the beneficiary. Could that former spouse receive the entire payout, leaving your loved ones with nothing?
The answer might surprise you because divorce doesn’t always automatically remove an ex-spouse from a life insurance policy. Depending on where you live, how you obtained the insurance, and what your divorce agreement says, your former spouse could remain legally entitled to the money. A simple oversight could create an expensive legal dispute at an already difficult time. Here’s what determines who actually receives the money.
