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Lets say a husband and wife both live together in a community property state, say Texas, and the husband is paying for a life insurance policy on the wife. The policy payout is 500 thousand dollars.

The couple have a home with a mortgage for nearly half that amount.

They have 4 children, some minors and some over 18.

The couple had the primary beneficiary to be payable to the husband at 100 percent. Secondary beneficiaries were to the 4 children at 25 percent each.

Is it allowable, legal, etc. for the wife (who's life is being insured) to call the insurance company without knowledge of the husband (who is paying the premiums) and change the primary beneficiaries to be the husband at 20 percent and each of the 4 children at 20 percent each?

Wouldn't the insurance company have to have the husband's permission to just change it?

This is in Texas. There is no divorce pending, nor is one even contemplated.

If there is a loss of life under the policy could the husband say that he intended for the life insurance to pay off the mortgage but the wife had changed the policy without permission or knowledge to him prior to the death, and he planned the insurance to pay off joint debts of the couple?

What would be the answer to this if the husband were named as the policy holder? Or the wife were listed as the policy holder? Or both?

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    Who is actually listed as the policy holder? – Nate Eldredge Jun 11 at 19:55
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    IANAL and can't speak to Texas, but I have filled out insurance forms in California, which is also a Community Property state. CA case law is that life insurance where premiums are taken from Community money is Community Property. I believe TX follows the same rule. The husband's share can not be reduced below 50 percent without his permission. The insurance company will be aware and will not make the change. (I had to sign a waiver to allow such insurance to go directly to our adult children whether I am alive or not.) – Andrew Lazarus Jun 11 at 22:41
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    @AndrewLazarus That's an answer, not an attempt to clarify the question. Please add it as an answer. – Martin Bonner Jun 12 at 8:56
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IANAL and can't speak to Texas, but I have filled out insurance forms in California, which is also a Community Property state. CA case law is that life insurance where premiums are taken from Community money is Community Property. I believe TX follows the same rule. The husband's share can not be reduced below 50 percent without his permission. The insurance company will be aware and will not make the change. (I had to sign a waiver to allow such insurance to go directly to our adult children whether I am alive or not.)

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