Can You Buy a Life Insurance Policy of any Kind on Your Ex-Husband With Yourself as the Beneficiary?
Yes, you can obtain life insurance coverage on your ex-husband stating you as the beneficiary. In order to be able to validly purchase a life insurance policy on your ex-husband, you need to establish the existence of Insurable interest. You may show insurable interest by proving that you will be in great financial distress in the event that your ex-husband dies. You need life insurance because your ex-husband’s death means that there will no longer be alimony payments and you’re going to have to shoulder all by your own, the expenses needed to raise your children, put them through college and give them a comfortable life. Divorce carries along a great deal of financial burden especially to the spouse who is left with the kids without proper and fair settlement. Aside from insurable interest that you should establish, you also need to let your ex-husband know about the insurance.
If you purchase a life insurance on your former husband, you just need to make sure that you will be named the owner and the beneficiary of the insurance policy. Your ex-husband will only be the one insured. You are the owner; you have an absolute control over the insurance policy. Absolute control means you’ll have control of the cash as well as access to loans and you can change the beneficiaries in the insurance policy or decrease the value of the death benefit. Your former husband as the insured has no power to do things that you can do as the owner of the policy.
For example you purchased a life insurance policy on your former husband and you were the one who had been paying for the premiums of the policy, you have an insurable interest in him. As the owner of the policy, you pay for the premiums and as a beneficiary you will receive the insurance proceeds if your ex-husband dies. But this of course will only happen in the absence of insurance fraud. If in case you die first, the insurance policy will still be effective but someone must take your place as the owner of the insurance policy. That’s why it is very important to make sure that the content of the insurance policy commensurate with your intention. You must designate contingent beneficiaries to replace you as a policy owner in your absence. And when your ex-husband passes away, the contingent beneficiaries will get the insurance proceeds.
Knowledge of your ex-husband about the life insurance policy he is being insured of is another condition for you to validly purchase the life insurance. It is impossible to have him insured without him knowing. In the Insurance policy application, your ex-husband will need to answer questions and sign documents. He may even be required to disclose his family history, pre-existing or present health conditions and take medical exams. But there are insurance companies, small ones which do not require a medical exam. One of the requirements of insurance companies is for the insurance agent to personally see the person named as the insured in the policy for health verification purposes. They will then evaluate if the person insured is healthy enough to qualify for the insurance policy.
Insurance companies are expected to exercise reasonable diligence in making sure that there is an insurable interest in the insurance policy. There are many cases of fraudulent life insurance policies which results to murder this is why insurance companies are very investigative in dealing with life insurance applications. Knowledge of your husband about the insurance is as important as the existence of insurable interest and absence of either condition could be a legal ground for cancellation of the insurance policy.