Effectiveness of Life Insurance Policies Following Divorce
Proposed bill would render some policies ineffective following divorce.
Senate Bill 2437 makes ineffective any insurance policy naming a former spouse as beneficiary following a divorce with 3 exceptions: (1) the judgment designates the insured's former spouse as the beneficiary; (2) the insured re-designates the former spouse of the beneficiary after the entry of judgment; or (3) the former spouse is designated to receive the proceeds in trust for, on behalf of, or for the benefit of a child or independent of either former spouse. If the beneficiary designation is not effective policy proceeds are payable to the named alternative beneficiary or, if none, to the estate of the insured. The bill passed both chambers on May 29, 2018 and was sent to Governor Rauner for signature or veto.
If you have questions about the impact of a divorce on the requirement for and/or effectiveness of a life insurance policy please contact Saxe Law LLC for a free consultation.
