You suspect that your spouse has secretly hidden money by purchasing a life insurance policy that he plans to cash in once the divorce is final.
The first step is to look for any evidence of payments to insurance companies. If you have access to financial records, check for automatic bill payments on credit cards or cancelled checks in your bank statements reflecting either the payment of premiums or the purchase of a policy. Also, be sure to keep an eye out for any bills or mailers from insurance companies.
If your spouse is a creature of habit, he might have purchased a policy through the agent that sold you your car or homeowner’s insurance. Try giving her a call. If you are not the beneficiary of your spouse’s policy, the agent has no obligation to give you any details. But, if you’ve worked with her for a while, she may be willing to give you information about whether your spouse has taken out any new life insurance policies.
If your spouse did not purchase a policy through his usual agent, think about whether he has any contacts or friends who work for insurance companies. For example, if he belongs to a country club, see if any of his fellow members sell insurance. Once you’ve identified these people, you can call them and ask them about your spouse’s policy. Why not ask for “a policy just like the one you sold him?”
If you can get the agent to reveal that he sold your spouse insurance, then all the details can be ferreted out once divorce proceedings have begun. Information regarding the spouse’s policy is discoverable, so you can subpoena the agent’s records or depose him. Federal courts and most states (excepting Illinois, Indiana and Missouri) do not recognize an insurer-insured privilege. This means that, while insurance agents might enter into confidentiality agreements with clients, they are otherwise under no legal obligation to keep client records confidential.
You can also try talking to your spouse’s employer. Even if you can’t get specific information on your spouse’s policy, you may be able to find out what insurance company the employer uses and whether your spouse has purchased insurance through them. Once divorce proceedings have begun, you can demand discovery of the employer’s records to see whether any unusually large payments were made to their insurance broker. You can also subpoena the insurance company’s records of any policies that cover your spouse.
Tax records could also provide some helpful clues. Generally, life insurance policies are not taxed, but that is not always the case. Some policies combine insurance coverage and an investment fund that can pay dividends that are taxed on a deferred basis. If you do not take dividends in cash or use them to purchase more insurance, those dividends remain with the insurance company and earn interest. This interest is taxable and would appear on your spouse’s tax returns.