Life insurance after separation

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

When it comes to separating from your de facto partner or spouse, you will need to make arrangements to divide everything; from the family home, cars, household and personal items, to investments and debts either jointly held or in your own name.

Preferably, you’ll want to make these arrangements without the need for court and lawyers. If you cannot reach an agreement, then they will need to be settled before the courts.

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 two 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 separates or divorces, 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. However, since 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 will also need to be reviewed if you have lodged a ‘binding nomination’. This is a legally binding statement which outlines how you want your super and associated payments distributed if you die.

If you have seperated and you partner was named in the binding nomination, the nomination becomes invalid and reverts to a non-binding nomination (one where the trustee has discretion to distribute your assets).

Should you wish for the binding nomination to continue, you will need to contact the trustee of your super fund or speak to your financial advisor.

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Compare life insurance quotes from these direct brands

Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Guaranteed Future Insurability Expiry Age Short Description
$1,500,000
65
$100,000
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99
Tailored life insurance so you know what you're covered for upfront. Take out a policy and get a $100 bonus gift after holding cover for 2 months. Ends 31 March 2019.
$1,000,000
64
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No expiry age as long as premiums are paid
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™.
$1,500,000
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$3,000
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80
Choice of cover options and flexible premiums to suit your budget. No lock-in contracts and fast application.

$15,000,000
69
$0
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99
Protect your family with NobleOak’s Life Insurance cover. Plus, pay no premium for 2 months with combined cover. T&C’s apply.
$1,500,000
69
$50,000
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99
Receive a 10% discount on the second person when two applications are submitted at the same time, and both policies are issued.
$1,500,000
64
$100,000
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No expiry age as long as premiums are paid
Cover up to $1.5 million with Guardian Life Insurance.
$1,500,000
65
$100,000
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No expiry age as long as premiums are paid
Go into the draw to win (1 of 10) $1,000 eftpos gift cards when you get a quote for Medibank Life Insurance. T’s and C’s apply.
$2,000,000
59
$50,000
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99
Get flexible life insurance up to the sum of $2,000,000.
$2,000,000
74
$100,000
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99
Join Qantas Life Insurance and earn up to 150,000 Qantas points. T&CS apply including minimum premium and policy hold periods apply to earn points.
$1,000,000
65
$100,000
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No expiry age as long as premiums are paid
Receive one month's premiums off every year if you pay annually upfront. T’s and C’s apply.

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Maurice Thach

An insurance researcher and writer for finder.com.au who loves finding an answer to the question "Am I covered for ________?" Maurice has also completed a Tier 1 Life Insurance and a Tier 2 General Insurance Certification under ASIC's Regulatory Guide 146. This means he can confidently provide general advice for life insurance and non-life insurance products.

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