Skip navigation
16 Jun 2011
Chris Torney Chris Torney

Could your ex-wife get your insurance payout?


Review your life cover regularly to ensure your protection payment goes to the right person if the worst happens.


If the worst happened to you, would your life insurance or death-in-service payout end up in your ex-wife or ex-husband’s bank account? 

That is the potential prospect for thousands of people who fail to keep their policy paperwork up to date. 

If it has been years since you joined your current employer or took out a life insurance policy, the person who you would like to benefit from any protection could well have changed – for example if you’ve since divorced or split up with a long-term girlfriend or boyfriend. 

Now is the time to make sure that your current wishes would be carried out. 

Life cover from your firm 

Many companies offer their workers death-in-service benefits, which provide an individual’s family with a lump sum payment if they die during their employment at that firm. 

These payments are made irrespective of whether the death occurs at the workplace or is in any way related to that job. 

Similarly, the families of company pension scheme members may also be entitled to a payout from the pension if the member dies before reaching retirement age. 

If either of these types of insurance applies to you, you will have been asked upon joining the company or pension scheme to name a beneficiary by filling out a form – you may not even remember doing this. But you should ask yourself: is this named beneficiary still the person I would most want to receive any payout?

Prevent ex-partners getting your payout

You may assume that, because you’ve been divorced, your ex is no longer entitled to a share of any of your assets. But this does not affect your death-in-service benefits: a divorce does not invalidate your choice of beneficiary. 

The only way you can change it is by talking to your human resources department, and filling out a new nominated-beneficiary form.

Matthew Lloyd, head of life insurance at, says: “Updating your nominated beneficiaries form if you have death-in-service cover through your company is something that you should do regularly. 

“If you die without having completed or updated your form, the money could go to the wrong person, potentially an old boyfriend or girlfriend or ex spouse even. It’s always a good idea to review your beneficiaries with major life changes such as the birth of children and divorce or marriage. 

“You should also consider whether your death-in-service benefits are enough to cover your existing debts, such as your mortgage and other loans, and replace your income in the long term. If not you should consider taking out some additional cover.” 

Standard life insurance 

The situation when it comes to your own life insurance is different, and depends on how the policy was set up.

With a normal life policy, any payout becomes part of the deceased person’s estate, to be shared out among the beneficiaries named in their will.

If there is no will, the assets are distributed according to intestacy laws. This usually means that the assets go to the spouse or civil partner, but this is not guaranteed, so you should consider making a will to ensure your wishes are followed explicitly.

But if you set a life policy up in trust, you will have to name beneficiaries of the trust, as well as the trustee or trustees who are responsible for it.

Again, if your family circumstances change, so might your desired beneficiary, so you will need to talk to your insurer and/or trustee to guarantee that any potential payout goes to the right person.

Regular reviews

Making sure your named beneficiary is up-to-date is just one reason you should review your life cover on a regular basis.

As your circumstances change, so might your insurance requirements: for example if you have more children or buy a more expensive house, you may want to be insured for a larger amount.

Or you may extend the term of your mortgage, because you’re moving or you want to reduce your monthly repayments. Your life insurance cover may need to be extended to match.