Can a spouse take half a life insurance policy?

A question that often arises in a divorce action is what is done with insurance policies. Many Florida residents may wonder whether they can claim a portion of a former spouse's life insurance policy during property division if they are listed as the beneficiary of the policy.

A term life insurance policy pay out at death. That means that while the policy holder is alive, there is no value or little value to the policy and nothing to distribute as part of the divorce. A named beneficiary has no right to claim the policy proceeds during the life of the insured. The right to collect does not mature until the policyholder dies without changing the beneficiary. One way for a spouse to take advantage of this type of policy is to ask the insured to transfer the policy. That way, the spouse can take over the payments, name the beneficiary as that person or children of the marriage and collect the benefit.

Another type of life insurance policy is called permanent life insurance. This is a type of savings plan where payments are invested for the insured and later paid out at death. The money invested in a permanent life insurance policy is considered a cash equivalent and may be subject to the equitable distribution process in a divorce.

A Florida family law attorney may be able to help persons contemplating divorce determine exactly which assets can be distributed and which may not. An attorney may also seek an order that a person maintain a life insurance policy for a spouse's benefit when the spouse is receiving alimony or raising children of the marriage.

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Source: Fox Business, "Don't I Get Half of My Ex's Life Insurance Policy?", Jack Hungelmann, May 06, 2013

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