In the absence of terms in the policy indicating that the rights of the beneficiary thereunder are conditioned upon continuance of the marriage relation then existing between the beneficiary and the insured, or the regulation of the matter by statute, the general rule is that the rights of the beneficiary in an ordinary life insurance policy, including the right to receive the proceeds thereof upon maturity of the policy, are in no way affected by the fact that the parties are divorced subsequent to the issuance of the policy, especially if no attempt is made to change the beneficiary after the divorce, and the insured continues to keep up the payments on the policy, or where the decree was in her favor.
Plaintiff's former husband, the deceased, named plaintiff as the beneficiary of a group life insurance policy for employees of a company that the deceased joined after separating from plaintiff. Despite entering into a separation agreement and property settlement with plaintiff, the deceased did not remove plaintiff as the beneficiary although the policy allowed him to do so without plaintiff's consent. The court held that plaintiff was entitled to the proceeds of the policy. Defendant estate administrators appealed but the court affirmed the decree of the trial court.
Did the divorce decree affect the right of plaintiff to receive the proceeds of her deceased ex husband's insurance policy?
The deceased could have changed the beneficiary of the policy. Because the property settlement did not refer specifically to the policy, the property settlement would not be construed as a release by plaintiff of her mere expectancy that she would survive her husband and remain the beneficiary of the policy. The trial court's decision to award plaintiff's attorney fees taken from proceeds of the policy was within its discretion to award costs and attorney's fees.