Life Insurance after Separation

What happens to my finances if I split up with my de facto partner or spouse?

If you separate from your spouse or de facto partner, you will need to make arrangements to divide your joint property. This includes all assets held in joint or separate names such as the family home, cars, household and personal items, investments and superannuation plus any debts such as mortgage debt, personal loans and money owing on credit cards.

If the split is amicable, you can choose to divide your property yourselves without the involvement of a court, or if you are unable to agree then you can apply to a court for financial orders regarding the division of your property.

Review your life insurance policy

What factors define a relationship as de facto?

A de facto relationship is defined as a relationship where two people who are not married to each other are living together as a domestic couple.

If a de facto couple separates, a claim to the courts for property settlement or maintenance will depend on at least one of four criteria being satisfied:

  • The relationship lasted at least 2 years
  • There is a child as a result of the relationship
  • The relationship is registered under state or territory law
  • One party made significant contributions and failure to make an order would result in a serious injustice.

What are the implications for life insurance or superannuation?

If a married or de facto couple separate or divorce, any life insurance or superannuation held by either party is also considered to be property and can be divided by agreement or by court order.

But because super is held in trust, unlike other forms of property, it is subject to rules regarding when it can be accessed. So even if divided, such an asset may not be accessible to either party until a condition of release can be satisfied.


Binding and nonbinding beneficiaries: how these need to be managed if a separation happens

Life insurance held inside super will also need to be reviewed if you have lodged a binding nomination with the trustee. This is a legally binding statement which outlines how you want your super and associated insurance payments distributed if you die.

If your spouse or de facto partner was named in the binding nomination as a beneficiary and you have since separated or divorced them, your binding nomination becomes invalid and reverts to a non-binding nomination (one where the trustee has discretion as to how your assets are distributed).

So if you wish your ex-spouse or de facto partner to continue to be a beneficiary of your super death benefit, you will need to contact the trustee of your super fund or speak to your financial advisor.

Compare Life Insurance quotes with an adviser

Please enter your full name
Please enter a valid email address
It's important to give us a valid phone number
Gender
Smoker
Date of Birth
Coverage is the amount of money that you will be paid in the event of a claim. An insurance consultant can help you determine an appropriate amount. Calculator
Provides a lump sum payment if you become totally and permanently disabled and are unable to return to work.
Provides a lump sum payment if you suffer a serious medical condition. Cover can be taken out for 40-60 medical conditions depending on the policy you choose.
By submitting this form, you agree to the finder.com.au privacy policy
Get quotes

Compare Life insurance quotes from these direct brands

Rates last updated October 20th, 2017
Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Guaranteed Future Insurability Expiry Age Short Description
$15,000,000
69
$0
Yes
99
Get a quote for up to $15 million in life insurance cover. Cover can be tailored to meet your personal needs.
$1,500,000
65
$3,000
No
80
Flexible cover options to suit your budget. New eligible customers can receive 25,000 Velocity Points. Ends 31 Oct. Min monthly premium and T&Cs apply.
$1,500,000
65
$100,000
Yes
99
Receive a discount of 10% on life insurance as a Woolworths Rewards Member. T's and C's apply.
$1,000,000
64
$100,000
No
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .
$1,500,000
69
$0
Yes
99
A simple life insurance product that can offer up to $1,500,000 in a lump sum payment on death or diagnosis of terminal illness.

Compare up to 4 providers

Maurice Thach

An insurance-savvy writer for finder.com.au who loves finding an answer to the question "Am I covered for ________?"

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
Ask a question