Insurance on ex wife

[WinoBlues]

Did result in a couple of new clients though

 

[Life Hawk]

Maybe, however, I have had three claims this year that were paid to the kids and not the primary because of this. Not the most pleasant claims conversations.

That is something to keep in mind... is this a company thing or was it a legal issue.

My assumption was that it was difficult for the beni (ex in these cases) to get a death cert.

Is that correct?

 

[VolAgent]

Existing policies usually doesn't matter what the relationship "is". What are they going to do, cancel the policy? If you own the policies and they are in force, put whomever you want as beneficiary. Even in a community property state, you are no longer a couple.

Guys might be over thinking these. In force policies are handled differently than new policies service wise.

As to the ownership, yes you are correct. The owner has a property right to it. I was referring to the beneficiary, which as you know is something different. Should someone own a policy on their now ex, I highly recommend they submit a beneficiary change form to ensure they remain the beneficiary.

It would really suck to own and pay on a policy for years, but not get paid because you were removed as beneficiary as a matter of law and never bothered to submit a beneficiary change form to reestablish yourself as the beneficiary.

 

[Allen Trent]

That is something to keep in mind... is this a company thing or was it a legal issue

In Michigan, it is understanding that the Divorce laws void the ownership & beneficiary rights of a spouse, unless affirmatively changing the beneficiary after the divorce to re-state the beneficiary to be the "ex-Spouse". I have seen claims end up in probate where a divorce occurred decades before & the ex-spouse continued to pay premiums or be charged COI for riders on a UL. but at claim time because the beneficiary was not updated after the divorce, it couldnt be paid by the carrier to the named person as they were no longer the correct relationship to the insured. You would think it would be paid to the contingent, but in several cases it was sent to probate to the deceased estate, so creditors are 1st in line.

Many clients end up with generic default divorce decrees that state the right to own or be the beneficiary of life, annuity, retirement is extinguished. so, if the desire is to continue ownership, it should be spelled out in the divorce decree I believe. also, if the plan is to keep an ex-spouse as a beneficiary (regardless of ownership) new beneficiary forms should be submittted even if they name the identical people already the beneficiaries.
This is one area I dont think we as practioners do a great job with. I have seen people own multiple policies with the same agent & the only policy with the correct current beneficiary is the newest policy bought, with the old ones still naming adult parents or the "estate"

Michigan divorce and retirement benefit laws
Change life insurance beneficiary after divorce

 

[Deepsea]

Ok.

I own life Insurance policies on myself, my now ex-wife, and my daughter of which I have made my daughter the SOLE beneficiary of while I was married (but after my wife filled for divorce).

In my Marital Settlement Agreement, I retained all ownership of ALL life insurance policies. While I was married and an insurance agent I owned all life insurance policies except one, on my wife. While we were still married she gave ownership to me of the one policy on her that she owned.

Again, as part of my Marital Settlement Agreement, I remained the owner f ALL life insurance policies on my life and my now EX-WIFE.

I went yesterday into my local agency and changed the policies that I own on my wife’s life, now that my divorce is official as of last week. I simply changed the answer to the question “RELATIONSHIP TO INSURED”. I now put EX-HUSBAND. I figure I don’t have to change ownership because I owned the polices before the divorce was final, and I own them after the divorce was final. Now that I submitted new beneficiary forms reflecting my “EX-HUSBAND” relationship to insured, I figure I am done and have made sure that if there is a death benefit claim in the future on my Ex-wife that I will be able to collect if I am still alive, or if I predecese my ex-wife, then my daughter will inherit the policy, from my Estate.(and the DAUGHTER is also the Secondary beneficiary)

Does this seem correct ?
Am I missing anything ?

Thanks,
Deepsea

 

[Deepsea]

Also I didn’t execute a Change in Ownership form, as I still remain the owner, and while the fact that I kept ownership in all life insuranc policies was in my Marital Settlement Agreemnt, I figure that has nothing to do with the life insurance company.

I simply filled out and submitted new beneficiary forms on the policies I own on my now EX-WIFE, reflecting accurately that I am now her EX-HUSBAND.

I should still have all rights and privileges as to do what I want as the sole owner of the insurance polices. And since I updated my relationship to the INSURED as now the EX-HUSBAND........I figure I am good to go.

Do I understand this right ?
Am I missing anything ?

Thanks again, and even though I’m not an agent anymore (maybe I might become one again in the future), I figure I could get some valuable information here, and also help out and give a heads up to anyone encountering a similar situation in their practice.

 

[Robert Barney]

Maybe, however, I have had three claims this year that were paid to the kids and not the primary because of this. Not the most pleasant claims conversations.

Can you point us to the actual law that sets this situation out?

 

[Deepsea]

The state of Florida passed something in 2012 I believe. Each state is different.

 

[WinoBlues]

Can you point us to the actual law that sets this situation out?

No. However, I can tell you about two claims I handled this year. On clients I wrote.

I, of course, handled these claims personally.

First one, primary beneficiary was now an ex-wife. Not wife as she was when we converted the term policy. Over $100,000.00 was paid to their children instead. Not one of the easiest client calls to make.

The second one was just a few months ago. FE policy, ex-wife dies. The owner / primary beneficiary was no longer Husband. The $35,000 was paid to the grandson.

That call went easier. The ex was good with his grandson getting the proceeds. He did not care and said to deal with the grandson and his parents. Wrote a couple of good size new apps on the grandson's parents. So, much easier.

If I get a chance I'll call the claims rep and see what I can get.

 

[Robert Barney]

The state of Florida passed something in 2012 I believe. Each state is different.

I would like to see the law if you can find it.

I am surprised that a beneficiary designation would be changed due to a change in circumstance.

Example:

John and Jane Smith are married. John buys a policy on Jane and makes himself beneficiary.

John Smith - owner
Jane Smith - insured
John Smith - beneficiary

John and Jane divorce and the settlement leaves John with the policy and no stipulation in the settlement regarding the policy. He continues as owner and as owner John, and only John, controls the naming of any beneficiary in the policy.

Even though John Smith is no longer the husband, he is still named as beneficiary of the policy.

I believe what you folks are saying is that there are state laws that step in and say, if John does not change the beneficiary and CLARIFY that he is no longer the husband, but is now an ex-husband, then the state law can circumvent John's beneficiary designation. Really?

Never heard of this before. I'm not saying your are not correct, I just have never heard of it and would like to see a reference to a law that actually says so. I would also wonder what led to such a peculiar law. It sounds like a solution looking for a problem.