Understanding Life Insurance
Life insurance after divorce explained
Joint life insurance policy after divorce
Couples often choose to take out joint life insurance policies. This may cost less than each person taking out their own policy. But what you do about joint life insurance after divorce is different. There are two options.
First, you could cancel the policy altogether. This would mean neither of you are covered any more. This is probably the simplest option. But it has drawbacks. You will have to ‘write off’ much of the money you paid into the policy. Also, the older you are, the more individual life insurance costs. So, if you both take out new individual policies it’s going to cost you both more.
Your second option is to transfer the policy to just one partner. They will then need to keep up payments that both of you were paying before. Depending on the circumstances of your divorce, this might be tricky to negotiate. To transfer the policy to one partner, you need to complete a legal document with both your signatures agreeing to the change. The insurer will then register this.
This approach might be right if one person is keeping the home or having custody of children. This is because the payout may be more useful for them.
Learn more: Joint vs single life insurance explained
Divorcing with a mortgage policy
Many people set up life insurance when they take out a joint mortgage. If one of you died, the other would receive money to pay off the debt. But after a divorce, this kind of insurance might not be right anymore.
If you both decide to sell up and leave the home, cancelling the joint life insurance after divorce might make most sense. You can then each get your own insurance for your new living situation.
Or if one of you decides to stay, it might be best to transfer the entire policy to them.
Your legal or financial adviser will be able to help you decide the best option for your circumstances.
Learn more: Mortgage protection explained
Do I need to let my life insurance provider know if I’m getting divorced?
It’s usually worth telling your life insurer of a big change like this. Life insurance divorce guidelines vary from one provider to the next. But the policy is normally provided based on certain facts about your life. If one of these changes, then the insurer will want to know. Check your policy documents or call the insurer if you are not sure..
This is especially true if you have a joint insurance policy. If you’re divorcing and no longer together, this may break the terms of the policy. If you needed to make a claim but hadn’t told the insurer about your new circumstances, they may not pay out.
Do life insurance policies form part of a divorce settlement?
Whether you include life insurance in a divorce settlement depends on a number of things. In some cases, life insurance is irrelevant to the settlement. In other cases, it’s very important. Or it could simply be up to the both of you to decide if you want to include it or not.
If you each hold individual life insurance policies, this will not affect the settlement.
Joint life insurance policies after a divorce may berelevant to the settlement. Depending on the kind of policy you have and what you choose to do, it will affect the settlement in different ways.
For example, if you sell the house, have no children and go your separate ways it might be easiest to cancel the policy. But if one of you decides to stay in your home, the person leaving needs to transfer their right to the policy over. They could reasonably argue they’ve been paying into that fund for several years. They may ask for compensation as they won’t benefit from it.
An alternative is to agree to keep the policy going but change the beneficiary. If you have children together, you might agree to transfer the payout into a trust if either of you dies. That means you both know your children would receive the money.
Vitality life insurance
Want to know more about life insurance or thinking about taking out a policy? Here are some of the benefits of taking out life insurance with Vitality:
- A brand you can trust - In 2024, we paid 98.9% of all Life Cover claims.*
- Get a lower monthly premium upfront when you add Optimiser to your plan. Keep your premiums low when you stay active.
- Access to Vitality partner discounts and rewards.
- Get free no-obligation advice. Our advisers offer expert advice to help you make the right decisions.
You're not alone in choosing Vitality. Over 2 million lives in the UK are now covered by our insurance, and we’re here to support you too.
Ready to take the next step? Getting a quote is simple and takes just a few minutes.
* VitalityLife Claims and Shared Value Report 2025
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