Life Insurance and Secondary Addressee

I have a family member whose ex-husband recently passed away. At that time my family member learned that she was not the only beneficiary of the ex-husband’s life insurance policy as was required by their divorce judgment. It turns out their three children were also listed as beneficiaries. In some ways this was fortunate, as the purpose of designating the ex-wife as the beneficiary was to insure the continued child support. However, this circumstance left the ex-wife in the potentially awkward position of having to sue the estate to take the life insurance proceeds from the children. Fortunately, this family was able to resolve this dilemma amicably. Unfortunately, this can easily happen to you if you do not seek the advice of a qualified family law attorney for your divorce.

Marital settlement agreements and final judgments of dissolution of marriage frequently include a requirement that the payor of child support or spousal support obtain or maintain a life insurance policy to insure the support against the death of the payor. The recipient is supposed to be the beneficiary, but this can be difficult to monitor or enforce since only the owner of the policy, usually the payor, is entitled to information about the policy. The payor can also change the designated beneficiary without the consent of the recipient. One way to prevent this from happening is to include a requirement that the recipient be designated as the “secondary addressee.” This will insure that the support recipient is notified of any changes to the policy. Some insurance companies use the terminology of “third party notification” rather “secondary addressee” but the concept is the same.

Another way to prevent changes to the beneficiary desigantion is to include a requirement that the insurance company be provided with a copy of the final judgment, but it is still advisable to list the recipient as the secondary addressee.