How Is Life Insurance Treated In A Connecticut Divorce Case?

By: Sarah E. Murray

How Do You Obtain Information Regarding Your Spouse’s Life Insurance Coverage During A Connecticut Divorce?

As part of the discovery (i.e., information gathering) phase of any Connecticut divorce case, it is critical that both sides disclose to one another information regarding any life insurance policies in place at the time, including life insurance policies provided through employment and life insurance policies held in a life insurance trust.  Each party has an obligation to disclose any life insurance policies on his or her life on a financial affidavit.  Even if a life insurance policy is held in a life insurance trust, it should still be disclosed on a financial affidavit, though not all parties do so.  It is common practice for Fairfield County divorce attorneys to request copies of life insurance policies and life insurance trusts as part of their formal discovery requests in order to obtain necessary information about insurance coverage.

Can A Party Change The Beneficiary Of His Or Her Life Insurance Policies During A Connecticut Divorce?

In Connecticut, changing the beneficiary of life insurance policies while the divorce action is pending is a violation of the automatic orders.  If a divorce attorney discovers that the opposing party has changed the beneficiary of his or her life insurance policy during the pendency of the case from his or her spouse to someone else, or has let the policies lapse by failing to pay the premiums, he or she can file a motion in order to request remedies from the court.

Is Life Insurance Considered Property That Can Be Divided By A Court?

Generally speaking, life insurance policies are not assets divisible by a Connecticut court.  The cash value of any whole life insurance policies, however, is an asset that can be divided in a divorce case.  Typically, the spouse who owns the whole life policy will keep the policy and the other spouse will receive an asset equivalent to his or her one-half share of the cash value.

Will Life Insurance Be Included In The Final Orders In A Connecticut Divorce?

Under Connecticut law, particularly General Statutes Section 46b-82, Courts can order that life insurance be maintained as security for a party’s alimony, child support, and/or college obligations.

Typically, the insured party will be the owner of the life insurance policy or policies, but sometimes parties negotiate for the other spouse to own the policy or policies. Experienced Fairfield County divorce attorneys will include provisions in a separation agreement stating that the insured party must provide proof of insurance coverage and beneficiary designation to the other party periodically in order to ensure that the agreed-upon life insurance coverage is in place. The parties can also agree that the life insurance company provides notification directly to the non-insured party if the life insurance policy lapses or if the premiums are not paid on time so that the non-insured party can seek the appropriate remedies.

How Are Life Insurance Trusts Treated During A Connecticut Divorce?

It is common in Fairfield County for divorce clients to have life insurance trusts that own their life insurance policies.  In cases where there is a life insurance trust, the divorce attorneys must obtain a copy of the trust in order to review the terms.  Some life insurance trusts exclude the other spouse as a beneficiary upon the filing of a divorce action and others exclude an ex-spouse.  Many times, experienced divorce attorneys will work with the parties’ estate planning attorneys in order to determine the terms of the trust and how best to accomplish the parties’ goals regarding life insurance coverage post-divorce.   

What If A Party Cannot Afford Life Insurance?   

General Statutes Section 46b-82 provides that a party may not be ordered to maintain life insurance after the divorce if he or she can prove by a preponderance of the evidence that he or she is uninsurable or cannot pay the cost of the life insurance premiums.  If a party has health issues or has other reasons, including age, for not being able to afford life insurance, he or she can request that life insurance not be ordered, or that a reduced amount of coverage be ordered.

Is A Life Insurance Obligation Modifiable?    

Unless there is an order precluding a party from modifying his or her life insurance obligation, most life insurance orders in Connecticut are modifiable by law if a party can prove a substantial change in circumstances.

Broder Orland Murray & DeMattie LLC is a Westport and Greenwich matrimonial law firm.  We have experience in dealing with life insurance coverage issues and can work with clients to ensure they are best protected, whether during or after a divorce.