SGLI Claims and Divorce Cases: An Ex-spouse’s Rights to Death Benefits After Separation

SGLI, or Servicemembers’ Group Life Insurance, is life insurance that covers eligible servicemembers. It is a federal government program controlled by federal laws. These laws take precedence over any conflicting state law or regulation.

The law regulating SGLI claims requires the insurance company to pay the benefits only to the beneficiary designated on the Beneficiary Election form. A claim from any other individual is denied. As a result, divorced individuals with court orders or state law claims may be unable to collect SGLI benefits if they are not beneficiaries of the SGLI policy.

If you or someone you know has issues with a delayed or denied SGLI claim after separation, call us at 888-510-2212 for a free consultation.

if my ex husband dies how do i get his sgli insurance

How Military SGLI Claims for Death Benefits Work in Divorce Cases?

Divorce is usually governed by the family laws of the state in which the divorcing parties reside. If life insurance is an asset that comes into play during divorce, the state court where the case is heard may issue an order obligating one divorcing party to carry his/her life insurance for the benefit of the children or the other party. It may also restrict a divorcing party from changing beneficiaries on the life insurance policy. This is very common and many people like to know that there is some degree of financial security in case of a former spouse’s untimely death.

If an individual violates a divorce decree or a child support court order and, for example, changes beneficiaries after divorce, the aggrieved party may have a state law claim for the life insurance benefits after the insured’s death. This is true only when the life insurance policy at issue is controlled by state laws. With life insurance policies such as military SGLI that are controlled by federal laws, the federal laws will trump any conflicting state laws or regulations, including a divorce decree or a contract.

What it means to a divorced individual and a possible recipient of SGLI benefits is that if a state divorce decree is in conflict with the beneficiary designation on an SGLI policy, the beneficiary designation on the SGLI policy will prevail and the state divorce decree will not be considered in determining who should receive the SGLI payout.

If a former wife has a divorce decree that obligates her ex-husband to maintain his SGLI policy for her benefit she may receive the benefits if the ex-husband complied with the divorce decree and named her the beneficiary on his SGLI policy. If he did not name her the beneficiary on his SGLI policy, she will not be able to get the SGLI payout under the law. However, it does not mean that there is no recourse at all.

In some states, individuals who have an alimony claim under a state divorce decree may establish a trust or other legal right to continue to receive alimony from the assets of the insured’s estate.

Although the law controlling SGLI precludes a state court from imposing a trust or other right to the proceeds of an SGLI insurance policy, it does not prevent an establishment of a constructive trust or other rights with respect to other assets based upon equitable principles.

A constructive trust is not a traditional trust. It is a legal entity that is designed as a remedy for individuals who have an unjust enrichment claim. In constructive trusts, there is no trustee and it operates by ordering the person who would otherwise be unjustly enriched to transfer the disputed property to the rightful recipient.

In order to create a constructive trust, there must be a court order. The requirements for obtaining a court order imposing a constructive trust will depend on the state in which the remedy is sought.

SGLI Death Benefits Claims Case Example 

For example, John was a servicemember with $400,000 in SGLI coverage. He and his wife Mary had 2 minor children. In 2010, John and Mary divorced. As part of their divorce, the court obligated John to maintain his life insurance coverage for the benefit of his two children and make Mary the sole primary beneficiary of the policy. Initially, John complied with the order, but changed beneficiaries in 2012 and made his sister the sole primary beneficiary on his SGLI policy. 

John died in 2013. Will Mary automatically receive the $400,000 in SGLI benefits? Not necessarily. Even though Mary has a state law claim, she may not receive the SGLI benefits after John’s death, because she was not the beneficiary of the SGLI policy. This is so because the laws controlling SGLI claims say that only the beneficiary can collect SGLI death benefit and these laws will take precedence over Mary’s state court order.

sgli ex spouse beneficiary rights

Contact an SGLI Lawyer if Your SGLI Claim for Death Benefits Was Denied or Delayed Due to Divorce Issues

Life insurance laws are complex and should be handled by an SGLI attorney. Expediting delayed claims or appealing denied ones should not be a do-it-yourself project. If your SGLI claim is delayed or denied, you may feel that there is nothing that can be done to recover a denied SGLI claim, but you may have a valid claim. Only an experienced SGLI attorney can help you understand your life insurance beneficiary rights and options. Our SGLI lawyers have years of experience in the area of SGLI and have helped many servicemembers’ families recover SGLI proceeds to which they are entitled under the law.

Here’s how we successfully handled a case where the insurer wrongfully denied our client the total amount of his SGLI claim.

No Legal Fees Unless We Win Your Case!

At our law firm, our SGLI attorneys work on a contingent fee basis. We will not charge a fee unless we win your case and you recover the denied benefits. 

Call us at 888-510-2212 and get a free consultation.

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About the author

Attorney Tatiana Kadetskaya has over 10 years of experience in life insurance law representing beneficiaries and policy owners. She is best known for successfully collecting denied and delayed claims and settling complex beneficiary disputes and interpleader lawsuits.

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