Marriage or divorce: don’t forget to adjust your life insurance
Finally tying the knot?
It’s always a good idea to review your life insurance policy before exchanging marriage vows.
Make sure that the beneficiary is really the person you want to protect should you die—that’s to say, your future husband or wife—and update the policy if need be.
Understand the revocable or irrevocable beneficiary designation.
Ask your partner to review their life insurance policy, and start life as a married couple on the right foot.
In the event of divorce or separation, you might also want to consider changing the beneficiary of your policy. Be aware that there are differences in the legislation governing beneficiaries in Canada’s various provinces; a pronouncement of divorce does not necessarily annul your beneficiary designation.
You must therefore remove your ex-spouse’s name as a beneficiary if you no longer want them to receive the life insurance benefit. If you don’t, your ex-spouse will receive the payout you intended for another beneficiary – a new partner or your children, for example.
Remember: If your ex-spouse was listed as an irrevocable beneficiary of your life insurance, you will need their consent to remove their name as the beneficiary, or to modify your policy.
To avoid any problems, check with your insurance company before taking out life insurance and pre-empt all scenarios … You just never know!