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Pre existing life insurance and divorce

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live4christp27

Junior Member
What is the name of your state (only U.S. law)? Tennessee

I have been at my employer since 2001. I've always carried my families insurance through work, medical, dental, life, etc. In April 2013 we divorced. At open enrollment in October of that year I was talking with the benefits coordinator about dropping the life insurance policy on my ex husband. He advised I should keep it since we had minor children, it cost less than $10 a month so I agreed. Been through open enrollment in 2014 and 2015 (October), noted it was ex husband and rolled right along.

Well, he was killed last Friday. Our son is now 18 and next of kin legally. We still have a 13 year old daughter. He had no life insurance or burial policy of his own. My 18 year old son does not have the means to handle this. His mother does not have the finances to do so. I thought about the life insurance and called our benefits department. They said yes you have a policy and we will mail the forms out to you.

Today the benefits department called me and said sorry, since you are divorced we are not going to pay out on this policy. Can they do that? Everything I can find on life insurance says divorce does not void or change a pre existing policy. I can't understand why I was advised and have paid into it an additional three years and now to be told this.

They said they would reimburse my premiums but that's just peanuts since the divorce compared to what the policy is worth. If I had been advised otherwise I could have taken a private policy and been putting those funds toward it instead. Can't do that after the fact.

Please note - this isn't a ploy to benefit from someone death. These are funds being contributed to burial costs of my children's father and what is left will help the gap of no support with the kids.

I'm so very upset over all this. It has been a nightmare to deal with. He is in a different state and over six hours away so we've had to coordinate having him transported etc.

Anyone have any insight or advice?
 
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LdiJ

Senior Member
What is the name of your state (only U.S. law)? Tennessee

I have been at my employer since 2001. I've always carried my families insurance through work, medical, dental, life, etc. In April 2013 we divorced. At open enrollment in October of that year I was talking with the benefits coordinator about dropping the life insurance policy on my ex husband. He advised I should keep it since we had minor children, it cost less than $10 a month so I agreed. Been through open enrollment in 2014 and 2015 (October), noted it was ex husband and rolled right along.

Well, he was killed last Friday. Our son is now 18 and next of kin legally. We still have a 13 year old daughter. He had no life insurance or burial policy of his own. My 18 year old son does not have the means to handle this. His mother does not have the finances to do so. I thought about the life insurance and called our benefits department. They said yes you have a policy and we will mail the forms out to you.

Today the benefits department called me and said sorry, since you are divorced we are not going to pay out on this policy. Can they do that? Everything I can find on life insurance says divorce does not void or change a pre existing policy. I can't understand why I was advised and have paid into it an additional three years and now to be told this.

They said they would reimburse my premiums but that's just peanuts since the divorce compared to what the policy is worth. If I had been advised otherwise I could have taken a private policy and been putting those funds toward it instead. Can't do that after the fact.

Please note - this isn't a ploy to benefit from someone death. These are funds being contributed to burial costs of my children's father and what is left will help the gap of no support with the kids.

I'm so very upset over all this. It has been a nightmare to deal with. He is in a different state and over six hours away so we've had to coordinate having him transported etc.

Anyone have any insight or advice?
I do not have any advice on the life insurance, however please do not forget to apply for Social Security Survivor's benefits for any of your children who are still minors. That will help replace child support.
 

cbg

I'm a Northern Girl
Just so I'm clear - we are talking about a dependent life insurance policy, where your ex-husband is the insured and you (or your son) is the beneficiary? And that you pay for as a benefit through your employer?
 

live4christp27

Junior Member
Just so I'm clear - we are talking about a dependent life insurance policy, where your ex-husband is the insured and you (or your son) is the beneficiary? And that you pay for as a benefit through your employer?
Yes. That is correct. I am the policy holder, it's automatically deducted from my pay weekly. I also pay into a policy on myself. These have been in place for many years (we were married for 23 years).
 

cbg

I'm a Northern Girl
Then what you need to do is get hold of a copy of the Summary Plan Description (SPD) the covers your life insurance plan, and see whether or not ex-spouses are considered eligible dependents to be covered by dependent life insurance. They MUST go by what is in the SPD.

If ex-spouses are eligible, then they MUST pay the claim. If they are not, they CANNOT pay the claim. However, in that case, they would owe you back any premiums that you paid that would be exclusive to this policy (i.e. that you wouldn't have paid anyway).

They are required by law to give you a copy of the SPD (or at least, point you to where it is on the company intranet) on request.

Once you have it, if you can't figure it out, bring it back here and I'll help you interpret.
 

commentator

Senior Member
And know that in some cases, insurance policies begin by giving you a hassle like this. They've found that a fair number of people will simply give up if they get one denial letter or rejection call. Please do as cbg asks and get this information for yourself and work through it. However, if this insurance benefit through your employer was called "spousal benefits" they very well could say that it was for a spouse only, and that you should've cancelled it after the insured party was no longer a spouse. So it's worth pursuing, but may not come to anything except getting the premiums back.
 

cbg

I'm a Northern Girl
Something I thought of later - it's not even impossible that three years ago, ex-spouses were considered covered dependents but that in the light of changing laws and rules the definition has changed. I know that my employer has updated the definition of an eligible dependent to exclude ex-spouses in most cases (not quite all) just in the last couple of years; it might be different now than then. If that proves to be the case it could be a bit more complicated, but the first step is to determine what the SPD says.

Someone made a mistake somewhere. Whether it was the representative 3 years ago who urged you to continue the policy, the representative now who is saying ex-spouses are not covered, or someone somewhere in the middle who didn't make it clear that ex-spouses could not longer be covered, someone made a mistake. But the recourse depends on what mistake was made.
 

live4christp27

Junior Member
Thank you for the advice. I have requested copies of the SPD as you recommended for each year from 2012 through present to see it any terminology etc changed. At this point the benefits coordinator I've been dealing with is not responding to my requests.
 

cbg

I'm a Northern Girl
Just one thing I want to make sure is clear - if they told you incorrectly 3 years ago that you could continue the policy and ex-spouses were not covered at that time, then shame on them for not giving you the correct advice. But the recourse, in that case, will be to refund the premiums you paid; paying the claim will not be an option.
 

Dandy Don

Senior Member
What is the stated purpose of the policy--to provide income in the event of the death of a spouse or to pay burial/funeral expenses?
How much would the policy pay?

Make sure your request for the SPD is IN WRITING to the benefits department.

You may also want to consider asking the Department of Commerce and Insurance about this to see if they have any advice or clarification.
 
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