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Dear Quentin,
Almost three years ago, I finally found the courage and strength to divorce my abusive firefighter husband after 15 years. Through the fire department, he had and still maintains a substantial life-insurance policy on me. We have no children and no financial obligations post-divorce.
He jokingly told me that the life-insurance agent said he will be “Suspect No. 1” if I die suspiciously, but that he can keep paying the premium and thus benefit if I die before him. The thought of him benefiting from my death infuriates me, especially because of how badly I was treated by him!
Our divorce was relatively simple, with the most complicated aspect being the qualified domestic relation order for his firefighter pension. The QDRO secures the part of his retirement owed to me. I understand if he passes after retirement, I will no longer receive retirement funds.
Now he could potentially benefit if I die first. Other than haunting him if that happens, what can I do to prevent him from keeping this policy on me?
Ex-Wife
You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
Dear Ex-Wife,
Contact your attorney and, if you at any time feel unsafe, please contact the police, and consider a restraining order.
Taking out an insurance policy on you through his work, at best, sounds highly unusual and, at worst, sounds fraudulent. He should not have a policy on you without your knowledge. He has either overstepped the mark with his dark — possibly even threatening — sense of humor, or he has crossed a legal line. Or both. Your lawyer will likely contact his HR department and the insurance company.
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‘Taking out an insurance policy out on you through his work, at best, sounds highly unusual and, at worst, sounds fraudulent.’
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This a cautionary tale on how to deal with all eventualities related to life insurance — regarding beneficiaries on employer-sponsored policies and spouses who take out life-insurance policies on each other — during the divorce. Waving a life-insurance policy in your face after you divorce is petty, peevish and provocative — yes, all three Ps — and, at the very least, a keen motivation for you to lead a healthy life. Given his abusive past, be aware that it’s also the last, desperate cries of a bully.
As for the policy’s legal standing: “You can take out a life insurance policy on your ex-spouse if there is an insurable interest such as maintenance (alimony) and/or child support and your ex agrees to sign the application and go through underwriting,” according to Stange Law Firm. “Often, as part of the divorce settlement, a life-insurance policy is negotiated prior to the divorce finalization to make sure that child support and/or maintenance gets paid should something happen to the ex.”
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‘He has either overstepped the mark with his dark — possibly even threatening — sense of humor, or he has crossed a legal line. Or both.’
”
Remember, your ex-husband cannot take out a life-insurance policy without your consent — and if he has done so, he has broken the law. “When you’re getting life insurance, the person whose life will be insured is required to sign the application and give consent,” according to Northwestern Mutual. “Forging a signature on an application form is punishable under the law. So the answer is no, you can’t get life insurance on someone without telling them, they must consent to it.”
Look at the terms of your divorce to see if there was a provision to void life-insurance policies held on each other. That is assuming you both agreed to the policy while you were still married. Some policies may become void upon divorce. Every life-insurance policy is different. For instance, the Servicemembers’ Group Life Insurance is operated under federal law, which would likely supersede state law and divorce decrees.
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‘A spouse has an insurable interest in another spouse. Thus, taking out an insurance policy on the life of a spouse is a very common practice.’
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I put your question to David Waltzer, a lawyer based in New York. In the event that this policy was taken out legitimately and with your knowledge, he says, “A spouse has an insurable interest in another spouse. Thus, taking out an insurance policy on the life of a spouse is a very common practice. Even if the insurable interest changes after the policy is created, the policy is still in force. An ex-spouse whose life the policy is on, has no say whatsoever. The place to effect an outcome here would have been during the divorce negotiations.”
Finally, if a person is convicted of a crime, they cannot benefit financially from that crime. There are “Crime Junkie” podcasts, “Dateline” episodes and, of course, legal precedent attesting to that. (Let’s assume your husband is taunting you by relaying that joke. What kind of an insurance agent makes such a comment? A bad one.) As for your husband, try not to allow him to press your buttons. Abusive former spouses rarely go quietly. Keep a record of all communication.
You are divorced, and he has no power over you.
Are you experiencing domestic violence or coercive control? Call the National Domestic Violence Hotline at 1-800-799-SAFE (7233) or visit thehotline.org. FreeFrom works to establish financial security for domestic-violence survivors, and the National Coalition Against Domestic Violence supports efforts to change conditions that lead to domestic violence and coercive control. You can also learn about creating a personalized safety plan here.
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