The rise of the ‘gray divorce’ insurance client

A gray divorce, which typically occurs in couples who are age 50 and older, can be one of the biggest financial transitions someone experiences.

“After decades of building a life together, clients are suddenly making decisions on a single income, with a different asset base, different goals, and often a very different vision for retirement,” said Kathleen Judge, financial advisor at Edward Jones.

Since about 36% of individuals are getting divorced later in life today, up from 8.7% in 1990, advisors need to understand the unique needs of this growing group.

By doing so, they can help clients evaluate their financial situation and design a plan that aligns with their new reality.

Reassessing the financial plan

Once an advisor learns about a client’s gray divorce, reviewing cash flow should be a top priority.

“Before discussing specific products, understand what their life looks like now,” Judge explained.

What income sources are staying? Which expenses are changing? What retirement assets are being divided? Those answers help determine whether existing insurance coverage still makes sense.

Judge pointed out that insurance needs often change, but not always in the way people expect.

“Rather than focusing solely on life insurance, I often find myself talking about healthcare expenses in retirement, long-term care planning, and how clients would handle a significant health event on their own,” Judge said.

When someone goes from planning as part of a couple to planning as an individual, those risks can feel much more real. Taking the time to address them can help provide financial stability and greater confidence during an important life transition.

In addition to the financial changes, people going through divorce later in life are often navigating emotional and lifestyle changes as well.

“An advisor can help them slow down, prioritize, and make sure their financial strategy reflects the life they're building going forward, not the one they had before,” Judge added.

Common gaps or mistakes among these clients

When couples have managed finances jointly for 20 or 30 years, it's common for one spouse to have handled most of the insurance decisions.

Therefore, after a gray divorce, it’s not unusual for someone to discover they don't fully understand their existing coverage, beneficiaries, ownership structures, or even where policies are located.

As a result, they might make decisions that don’t make sense for their new situation or overlook coverage gaps.

One of the most common mistakes this group makes is also the simplest: failing to update beneficiaries.

“I’ve seen the complications that can occur when an ex-spouse is left on as beneficiary of a policy [or any beneficiary-based account] for that matter,” said Bennett Pardue, partner and financial advisor at New Canaan Group with Equitable Advisors.

Advisors should educate clients on how their insurance needs may change.

Then, they can guide them through the process of reviewing and updating life insurance policies, retirement accounts, annuities, transfer-on-death registrations, and estate documents as soon as possible.

At the end of the day, those going through a divorce aren’t just dividing assets; they’re rebuilding a vision for the future. Advisors who understand that can help clients navigate the transition with greater clarity and confidence.

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