divorce
Can my ex-wife keep a term life insurance policy on me that was started while we were married? We live in Georgia
<p>My (soon to be) ex-wife and I are finalizing our divorce.  We have no children and there is no alimony.  We are splitting our marital property and each getting a house so there is no financial obligation or deficit for either party.  There is an existing term life insurance policy on me (I'm the insured) and I do not consent for my ex-wife to keep it in effect.  Can she, even without my consent?  We live in Georgia.</p>

<p><a href="https://law.justia.com/codes/georgia/2019/title-33/chapter-59/section-33-59-2/" rel="nofollow noreferrer">Current Georgia law</a>, which has substantially re-written the code since 1985, introduces the concept of &quot;stranger-originated life insurance&quot; (STOLI), as of 2005. It is a specific case of &quot;fraudulent life settlement act&quot;, which is</p>
<blockquote>
<p>Acts or omissions committed by any person who, knowingly and with
intent to defraud, for the purpose of depriving another of property or
for pecuniary gain, engages in acts, or permits its employees or its
agents to engage in acts, including, but not limited to: (i)
Presenting, causing to be presented, or preparing with knowledge and
belief that it will be presented to or by a provider, premium finance
lender, life settlement broker, insurer, insurance producer, or any
other person, false material information, or concealing material
information, as part of, in support of, or concerning a fact material
to one or more of the following...(X) Stranger originated life
insurance as defined in paragraph (24) of this Code section</p>
</blockquote>
<p>which says</p>
<blockquote>
<p>a series of acts or a practice to initiate a life insurance policy for
the benefit of a third-party investor who, <strong>at the time of policy
origination, has no insurable interest in the insured</strong>. Stranger
originated life insurance acts or practices include, but are not
limited to, cases in which life insurance is purchased with resources
or guarantees from or through a person or entity who, <strong>at the time of
policy inception</strong>, could not lawfully initiate the policy himself or
herself or itself, and where, <strong>at the time of inception</strong>, there is
an arrangement or agreement to directly or indirectly transfer the
ownership of the policy or the policy benefits to a third party.
Trusts that are created to give the appearance of insurable interest
and are used to initiate policies for investors violate insurable
interest laws and the prohibition against wagering on life. Stranger
originated life insurance arrangements do not include those practices
set forth in subparagraph (C) of paragraph (11) of this Code section.</p>
</blockquote>
<p>As stated in the <a href="http://ncoil.org/wp-content/uploads/2016/04/AdoptedLifeSettlementsModel.pdf" rel="nofollow noreferrer">NCOIL Life Settlements Model Act</a> which Georgia adopted,</p>
<blockquote>
<p>It is an essential public policy objective to protect consumers
against stranger-originated life insurance (STOLI). STOLI is a
practice or plan to initiate a life insurance policy for the benefit
of a third party investor who, at the time of policy origination, has
no insurable interest in theinsured.  STOLI practices include but are
not limited to cases in which life insurance is purchased with
resources or guarantees from or through a person, or entity, who, at
the time of policy inception, could not lawfully initiate the policy
themselves, and where, at the time of inception, there is an
arrangement or agreement, whether verbal or written, to directly or
indirectly transfer the ownership of the policy and/or the policy
benefits to a third party.  Trusts, that are created to give the
appearance of insurable interest,and are used to initiate policies for
investors, violate insurable interest laws and the prohibition against
wagering on life.</p>
</blockquote>
<p>STOLI thus refers to a scheme to obtain insurance without insurable interest <em>at its inception</em>, and does not include an alleged loss of insurable interest. I conclude that such life insurance is not statutorily prohibited in Georgia: which does not preclude the possibility that the insurance contract precludes such an arrangement, and that the owner has an obligation to report the divorce. It's also not clear that the wife totally lacks all insurable interest, given the existence of retirement plans including Social Security.</p>

<blockquote>
<p>Can my ex-wife keep a term life insurance policy on me that was started while we were married?</p>
</blockquote>
<p>No. Even if the terms of the policy don't automatically render it null and void as a result of the divorce, the policy is voidable by you insofar as you oppose to her keeping the policy in effect.</p>
<p>Your description altogether reflects a change of circumstances such that your ex-wife can no longer posit that you represent an insurable interest. See <a href="https://www.leagle.com/decision/1985555255ga3001464" rel="nofollow noreferrer">*Wood v. N.Y. Life Ins. Co., *255 Ga. 300, 303-304 (1985)</a>:</p>
<blockquote>
<p>The statutory requirement of insurable interest was intended to
prevent wagering on human lives. The insurable interest requirement is
inbred with a potential conflict of interest when one with an
insurable interest obtains coverage on the insured without the
insured's consent.</p>
<p>[...]</p>
<p>[I]t is against public policy to procure insurance on the life of
another without his consent</p>
</blockquote>
<p>(citations omitted).</p>
<p>You should approach the insurer (and consult the policy terms) to ensure that everybody is on the same page.</p>
