What Happens to My Insurance After a Divorce?

Elderly couple outside as man looks off to the distance

Along with the heartache and upheaval of divorce, it can be stressful to untangle the life you’ve built together. From shared property and assets, to custody agreements and financial matters, there’s a lot to consider during what can be quite a painful time - so we want to help make things a bit clearer when it comes to your life insurance. If you took out a British Seniors joint policy with your former spouse, there are a few options you could consider for your cover going forward. 

How does a joint policy work? 

When you take out a joint policy with British Seniors, you’re putting financial security in place so that your partner and loved ones will be protected no matter which of you passes away first. One of you will be the main life insured, but you are both named as policyholders, and your premiums and paperwork are combined for simplicity. The person you share your cover with might also be the named beneficiary who receives the payout after you pass away. 

Your shared financial assets 

A life insurance policy is a financial asset. In the process of your divorce, you might discuss a division of assets, and your policy could be treated as such an asset. With British Seniors life insurance, your joint plan is one policy with two policyholders; you and your former spouse. As it’s just one policy, this means it can’t be divided between you. 

What will happen to our joint policy? 

As our joint policies can’t be split, divorce really comes down to two options; you could either cancel your plan entirely, or simply remove the second person from the policy and allow the other person to become the sole policyholder. What you do with your policy is entirely your decision. British Seniors won’t take any action on your behalf, so it’s important that the main policyholder lets us know about any changes they want made to the policy.  

Should we cancel our shared policy all together? 

While cancelling is an option, it might not be the most cost-efficient decision. Unless you’re cancelling within the first year of a policy, the premiums you’ve paid to date are non-refundable, so if you end your policy you’ll lose the money you’ve put in. If you cancel your policy at any time, your loved ones won’t receive a payout when you pass away.  

Another issue with cancelling your policy is the potential difficulty in securing new life insurance at a similar rate now that you're slightly older than you were when you took out your current policy. The younger you are when you apply for life insurance, the better your premium rates will be in most cases. To avoid losing the premiums you’ve paid so far and save at least one of you from paying higher premiums, you could simply remove the second life insured on the joint policy. 

Can we still share our policy if we choose to? 

If your break-up is amicable, you might wonder if it’s possible to keep your joint policy, particularly if you have children together or want to remain as the beneficiary of each other’s estates. While it’s generally a good idea to speak to us about your options after a big life change, whether or not you keep the policy as it is will be completely your choice, just as it will be up to you to request any changes to your plan.  

Other things to consider 

Usually married couples will list one another as the beneficiary of their life insurance policy (whether its joint or single), which would mean your former spouse will receive your benefit amount if you were to pass away. If this isn’t what you want, have a think about who your new beneficiary should be, and let us know as soon as possible. 

You may also want to think about whether your cover amount is still right for you after such a big change to your lifestyle. If you want to increase or decrease your benefit amount, you can apply to make that change and we’ll see what we can do for you depending on age and policy limits. 

We’re here for you 

We know that this can be a very difficult time, but our customer service team are friendly and highly trained and will do our best to answer your questions and concerns with understanding. Applying to make changes to your policy is easy and free of charge. If you’d like to discuss your options or want to let us know about changes you’d like to make, please don’t hesitate to get in touch.