In recent years, with China’s divorce rate increasing annually and the economic value of insurance products becoming more prominent, the division of commercial insurance rights and interests upon divorce has naturally become a focus of public attention. However, neither the Civil Code of the People’s Republic of China (hereinafter referred to as the “Civil Code”) nor the Insurance Law of the People’s Republic of China (hereinafter referred to as the “Insurance Law”) provides clear provisions on this issue, nor has the Supreme People’s Court issued corresponding judicial interpretations to regulate it.

This article will organize, interpret, and discuss the adjudication ideas on this issue based on different types of insurance and the performance status of insurance contracts at the time of divorce proceedings, combined with the nature of commercial insurance, existing theories, and judicial precedents, aiming to better clarify the division of commercial insurance rights and interests upon divorce.

I. Nature and Types of Commercial Insurance

Commercial insurance is a contract-based financial product distinct from social insurance. It refers to a commercial insurance act whereby the insured pays premiums to the insurer according to the contract, and the insurer assumes liability to compensate for property losses caused by the occurrence of possible insured events as agreed in the contract, or to pay insurance proceeds when the insured dies, is injured, becomes ill, or reaches the age, term, or other conditions agreed in the contract.

Based on the different nature of the subject matter of insurance, according to Articles 12 and 95 of the Insurance Law, commercial insurance is divided into property insurance and personal insurance.

Property insurance refers to an insurance contract where the insured pays premiums to the insurer, and the insurer assumes liability to compensate for losses caused by natural disasters, accidents, or other agreed events to the insured property and related interests. Its subject matter is specific tangible property and related interests, mainly related to “things,” and the purpose of the insurance proceeds is to compensate the insured for property losses caused by the damage or loss of that specific property, and it should “strictly apply the principle of indemnity and the system of insurance subrogation.”

Personal insurance takes a person’s life or body as the subject matter. When the insured’s life or body suffers an insured event or the insurance term expires, the insurer pays insurance proceeds to the insured or beneficiary. Its subject matter is mainly related to “persons.” Depending on the type of insurance, personal insurance has multiple values and functions, including loss compensation, personal protection, savings, and estate planning.

II. Types of Property Rights and Interests Involved in Commercial Insurance

Commercial insurance property rights and interests mainly cover various property rights and interests such as insurance premiums, insurance proceeds, and policy cash value.

Insurance premiums refer to the fees paid by the insured to the insurer as determined by the compensation limit, premium rate, and other matters specified in the insurance contract.

Insurance proceeds refer to the amount paid by the insurer to the insured or beneficiary according to the insurance contract, or the amount compensated for material losses when an insured event occurs.

Policy cash value refers to the value of a personal insurance policy with a savings nature. The insurer usually sets aside liability reserves to fulfill its obligations under the insurance contract. If the policy is surrendered midway, the surrender value paid is based on the liability reserve of that policy.

III. Rules for Dividing Commercial Insurance Rights and Interests upon Divorce

According to Articles 1062 and 1065 of the Civil Code, only marital property needs to be divided upon divorce. Therefore, the prerequisite for clarifying which insurance property rights and interests can be divided upon divorce and how to divide them is to determine whether those insurance property rights and interests constitute marital property. Since property insurance and personal insurance differ significantly in terms of the subject matter of insurance, the nature of insurance proceeds, and other aspects, each has its own criteria for judgment in divorce proceedings. Therefore, this article will discuss the two types of insurance separately.

(A) Division Rules for Commercial Property Insurance Rights and Interests

As mentioned earlier, the subject matter of property insurance is “things” and related interests. Regarding the division of insurance proceeds, given that property insurance payments aim to compensate the insured for losses caused by damage or loss of the insured subject matter, the attribution of insurance proceeds should also be consistent with the attribution of the insured subject matter. For property insurance that is still within the performance period at the time of divorce, when insurance proceeds have not yet been obtained, the object of division of property insurance rights and interests mainly involves insurance premiums.

1. Division of Rights and Interests and Economic Compensation for Insurance Purchased for Separate Property

（1）Insurance purchased before marriage or after marriage for separate property, with premiums paid from pre-marriage separate property.

Insurance proceeds obtained after marriage:
Even if the insured obtains insurance proceeds during the marriage, these proceeds are intended to compensate for the loss of value of one spouse’s pre-marriage separate property and are the substitute for the damage or loss of pre-marriage separate property. Therefore, it is appropriate to determine that the insurance proceeds belong to the insured’s separate property.

Still within the performance period at the time of divorce:
At this time, the object of division of property insurance rights and interests mainly involves insurance premiums. Since the premiums were paid from the insured’s pre-marriage separate property, there is no need to consider division.

（2）Insurance purchased after marriage for pre-marriage separate property, but with premiums paid from marital property.

Insurance proceeds obtained after marriage:
Two views currently exist: one view holds that the insurance proceeds should be considered marital property; another view holds that the insurance proceeds should belong to the owner of the insured subject matter and are the insured’s separate property. This article argues that the insurance proceeds are essentially still the substitute for the damage or loss of pre-marriage separate property, and the source of premiums does not affect this attribute, nor can it transform them into marital property. Regarding premiums, although some judgments currently deem premiums as consumptive expenses, with the relevant property rights and interests having been transformed and no longer divisible as marital property, this issue should not be handled with a “one-size-fits-all” approach based on the compensation rules under marital property law. It should be judged by comprehensively considering the amount of premiums and whether the other spouse was aware of them.

Still within the performance period at the time of divorce:
At this time, the object of division of property insurance rights and interests mainly involves insurance premiums. According to the Civil Code, both spouses have equal rights to marital property. Theoretically, the other spouse may require the insured spouse to pay half of the premium amount as compensation.

2. Division of Rights and Interests and Economic Compensation for Insurance Purchased for Marital Property

（1）Insurance purchased before marriage for marital property, with premiums paid from pre-marriage separate property.

Insurance proceeds obtained before or after marriage:
Following the “principle of accessory things,” if the marital property is owned as tenancy in common, and the insured only insures their own share, the insurance proceeds obtained are the substitute for the damage or loss of pre-marriage separate property and are deemed separate property, requiring no division. If the marital property is owned jointly, such that the insurance proceeds obtained by the insured may correspond to the entire insured subject matter, the insurance proceeds should be divided according to the proportion of each spouse’s share in the insured subject matter. If one spouse receives insurance proceeds due to the other’s insurance purchase, they should pay the corresponding premiums to the insured spouse in proportion to the proceeds received.

Still within the performance period at the time of divorce:
At this time, the object of division of property insurance rights and interests mainly involves insurance premiums. Since the premiums were paid from the insured’s pre-marriage separate property, there is no need to consider division.

（2）Insurance purchased after marriage for marital property, but with premiums paid from pre-marriage separate property.

Insurance proceeds obtained after marriage:
Given the special nature of the marital relationship, if the insured voluntarily uses their pre-marriage separate property to pay premiums for marital property, it should be deemed a gift from the insured spouse to the other spouse. Furthermore, the insurance proceeds obtained are the substitute for the damage or loss of marital property and should appropriately be deemed marital property.

Still within the performance period at the time of divorce:
At this time, the object of division of property insurance rights and interests mainly involves insurance premiums. Since the premiums are a gift from the insured spouse to the other spouse, no division is required. After divorce, if an insured event occurs and a claim is settled, the insurance proceeds should be consistent with the attribution of the insured subject matter at the time of divorce.

（3）Insurance purchased after marriage for marital property, with premiums paid from marital property.

Insurance proceeds obtained after marriage:
The insurance proceeds constitute marital property and should be divided upon divorce.

Still within the performance period at the time of divorce:
The insured subject matter involved in the insurance contract may be awarded to one or both spouses in the divorce proceedings, making the situation more complex: If both spouses agree to surrender the policy, the surrender value can be divided equally; if the insured subject matter belongs to one spouse, based on the principle of fairness, if that spouse does not surrender the policy, they should compensate the other spouse with half of the premium amount; and if the insured subject matter is owned equally by both spouses, the premiums need not be divided, and if a claim arises in the future, the insurance proceeds obtained will be divided equally.

(B) Division Rules for Commercial Personal Insurance Rights and Interests

Personal insurance is mainly divided into accident insurance, health insurance, and life insurance.

Accident insurance provides partial or full insurance proceeds to the insured when they suffer an accidental injury, ensuring they receive necessary medical treatment and living security. Common products include comprehensive accident insurance, transportation accident insurance, and travel accident insurance.

Health insurance pays insurance proceeds to the insured when they become ill or experience abnormal health conditions to cover treatment and living expenses. Common products currently include medical insurance, disease insurance, etc.

Life insurance takes the insured’s life as the subject matter and pays proceeds upon the insured’s survival or death. Common products currently include whole life insurance, annuity insurance, and endowment insurance. The characteristic of this type of product is that it is not only related to the person but also has investment-type property functions such as savings and dividends.

As mentioned, all three types of personal insurance are related to “persons,” but their nature, functions, and purposes differ. Given the special nature of personal insurance, the parties’ autonomy of will should be fully respected, with negotiation given priority. If no agreement can be reached, the criteria for judgment should comprehensively consider the main purpose of the insurance proceeds, the source of premiums, whether the insured and the beneficiary are the same person, and whether the insurance contract has cash value. Accordingly, this article will organize and summarize the division of insurance rights and interests based on the type of personal insurance:

1. Division of Rights and Interests and Economic Compensation for Accident Insurance and Health Insurance

（1）Insurance proceeds already obtained at the time of divorce

The insurance proceeds from protection-type insurance such as accident insurance and health insurance are mainly used for specific purposes such as treatment, rehabilitation, and living expenses of the insured or victim due to illness or injury, giving them a significant personal attribute. Therefore, regardless of whether premiums are paid from pre-marriage separate property or marital property, the insurance proceeds should be deemed the insured’s separate property. In this regard, Paragraph 2 of the “Minutes of the Eighth National Conference on Civil and Commercial Trials (Civil Part) of the Supreme People’s Court” (hereinafter referred to as the “Eighth Civil and Commercial Trial Minutes”) also stipulates: “During the marriage, insurance proceeds of a personal nature obtained by one spouse as the insured under an accident insurance contract or a health insurance contract should be deemed separate property, unless otherwise agreed by the parties.”

Additionally, if the premiums originate from marital property and the premium amount is relatively high (whether it is high can be considered based on factors such as the proportion of disposable funds in marital property and the family’s consumption level), based on the principles of fairness and reasonableness, to balance the interests of both spouses, consideration may be given to having the spouse who received the insurance proceeds appropriately compensate the other spouse, with the compensation amount not exceeding half of the premiums.

（2）Insurance proceeds not yet obtained at the time of divorce

Protection-type insurance generally does not have cash value or has a low cash value.

If the insurer and the insured are the same person, the benefits of the insurance contract should belong to that person. If premiums were paid from marital property, in principle, it can be deemed as a daily consumptive expense of the family, and no compensation for premiums is required. However, if the premium amount is significantly higher than the family’s consumption level and there is no evidence that the other spouse was aware of it, consideration may be given to having the spouse who obtains the insurance benefits compensate the other spouse with half of the premium amount.

If one spouse is the insured and the other spouse is the beneficiary, according to Article 12, paragraph 1, and Article 31 of the Insurance Law, after the marriage relationship is dissolved, the insured spouse no longer has an insurable interest in the beneficiary spouse. At this time, the parties should negotiate to change the beneficiary. If the insured spouse does not agree to cooperate, the beneficiary spouse may apply to surrender the policy in accordance with Article 2 of the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Insurance Law of the People’s Republic of China (III)” (hereinafter referred to as the “Insurance Law Judicial Interpretation III”).

2. Division of Rights and Interests and Economic Compensation for Life Insurance

（1）Insurance proceeds already obtained at the time of divorce.

① Insurance proceeds obtained by one spouse as the beneficiary designated by a third party

If neither spouse is the insured or the beneficiary, but one spouse merely receives insurance proceeds as a beneficiary, given that the beneficiary of personal insurance must be approved by the insured, this situation is essentially similar to designated inheritance and gifts under Article 1063 of the Civil Code, akin to a directed gift to the beneficiary. Based on the exclusive nature of protection-type insurance and fully respecting the autonomy of the insured and the beneficiary, the insurance proceeds obtained should be deemed the separate property of the beneficiary spouse. The Eighth Civil and Commercial Trial Minutes also point out that insurance proceeds obtained by one spouse as the beneficiary under a life insurance contract with death as the payment condition should be deemed separate property, unless otherwise agreed by the parties.

② Insurance purchased before marriage, with all premiums paid from pre-marriage separate property

Since the insured completed all premium payments before marriage, the premiums of this insurance contract did not involve marital property, and the insurance proceeds are essentially the contractual benefits generated under this contract, which were formed before marriage. According to Article 1063 of the Civil Code, one spouse’s pre-marriage property belongs to that spouse’s separate property. Therefore, the insurance proceeds obtained should belong to the insured’s separate property and shall not be divided as marital property.

③ One or both spouses purchase insurance for their children, with the children as beneficiaries

During the marriage, if one or both spouses purchase personal insurance for their children, with the children as beneficiaries and the children are not deceased, the insurance proceeds obtained should belong to the children and shall not be divided as marital property.

④ Insurance proceeds paid from marital property in full, with payment conditioned on survival to a certain age

During the marriage, insurance proceeds obtained by one spouse under a cash-value insurance contract (such as whole life insurance, endowment insurance, etc.) with payment conditioned on survival to a certain age have a certain investment attribute. The insurance proceeds thus obtained constitute investment income. According to Article 26 of the “Interpretation of the Supreme People’s Court on the Application of the Marriage and Family Section of the Civil Code of the People’s Republic of China (I)” (hereinafter referred to as the “Marriage and Family Judicial Interpretation I”), such proceeds should be deemed marital property.

⑤ Insurance purchased before marriage with separate property, but premiums paid from marital property after marriage

Currently, there is no consensus on this issue in theory and practice.

One view holds that, according to Article 1063 of the Civil Code, insurance proceeds are essentially one of the considerations for premiums. Even if the insurance proceeds are obtained during the marriage, their essence is the performance of a contract concluded before marriage, thus they constitute separate property. However, premiums should be distinguished: for premiums paid from marital property during the marriage, regardless of whether insurance proceeds are obtained, that portion of premiums should be deemed marital property and divided. For example, in the case of Liu v. Yang regarding post-divorce property disputes [Reference Case 1], the Langzhong City People’s Court of Sichuan Province held that Yang purchased endowment insurance (dividend type) before marriage with separate property, but paid premiums from marital property after marriage. Although the insurance contract has not yet matured, the economic value existing during the marriage should be deemed marital property. Therefore, the premiums paid after marriage and the income generated after marriage should be divided.

Another view holds that the insurance proceeds income generated after marriage from investment-type insurance purchased before marriage constitutes income from pre-marriage separate property after marriage. According to Article 26 of the Marriage and Family Judicial Interpretation I, income derived from one spouse’s separate property after marriage, except for natural fruits and natural appreciation, should be deemed marital property. Therefore, the income generated after marriage from premiums paid before marriage, premiums paid from marital property after marriage, and the income generated therefrom all constitute marital property and should be divided in divorce proceedings.

In summary, the two views can be integrated to fully balance the protection of the personal nature of the insurance contract and the community property system. Referring to the approach of “individual pre-marriage mortgage loan with post-marriage marital property repayment,” the premiums paid from marital property after marriage and the income corresponding to those premiums should be deemed marital property, while premiums paid from separate property before marriage and the income generated therefrom should be separate property.

⑥ Insurance purchased after marriage with pre-marriage separate property

There is currently controversy in judicial practice regarding this issue.

For example, in the case of C v. Xie 1 and others concerning inheritance disputes [Reference Case 2], the Guangzhou Intermediate People’s Court held: “Wang’s act of purchasing insurance was an investment act. The income generated from this investment during the marriage should be deemed marital property. Therefore, for the cash income of 1,118,829.11 yuan from the insurance in question, after deducting Wang’s pre-marriage separate property of 858,899.8 yuan, the remaining 259,929.31 yuan should be deemed marital property of Wang and Xie 3.” Additionally, in the case of Jin v. Xu regarding post-divorce property disputes [Reference Case 2], the Shaoxing Intermediate People’s Court of Zhejiang Province held that Jin and Xu had entered into a “Commitment Agreement” regarding the division of marital property during the marriage. In other words, the time boundary between marital property and separate property was the date of signing the “Commitment Agreement.” After that date, Xu used separate property to purchase insurance and pay premiums, and the insurance benefits generated therefrom should be deemed Xu’s separate property, requiring no division.

Regarding this issue, the author tends to recognize the act of purchasing insurance after marriage as an investment act involving time and effort in selection and evaluation. According to Article 26 of the Marriage and Family Judicial Interpretation I, in insurance types with investment functions, insurance benefits other than premiums should be considered investment income from pre-marriage separate property after marriage. The portion of premiums belonging to pre-marriage separate property should be separated from the insurance proceeds, and the remainder should be divided as marital property.

（2）Insurance proceeds not yet obtained at the time of divorce

① One or both spouses purchase insurance for their children

At the time of divorce, if a personal insurance contract purchased for a minor child is still within its effective period, since the ultimate benefits of the insurance belong to the minor child, the insurance should be deemed a gift to the minor child and shall no longer be divided as marital property.

② Insurance purchased before marriage with premiums paid from pre-marriage separate property

The rights and interests under the insurance contract were already determined before marriage, and all premiums were paid from pre-marriage separate property without involving marital property. The insurance rights and interests should appropriately be deemed separate property.

③ Insurance purchased after marriage with premiums paid from marital property

The Eighth Civil and Commercial Trial Minutes and the “Guidelines for the Trial of Family Dispute Cases (Marriage and Family Section)” issued by the First Civil Division of the Jiangsu High People’s Court both have relevant provisions on this issue. Based on the aforementioned two documents, this article summarizes as follows:

For personal insurance contracts insured with marital property during the marriage that are still valid at the time of divorce, if the spouses claim to divide the policy’s cash value, such claims should be supported.

If both the insured and the beneficiary are the same spouse, at the time of divorce, the spouses may agree to surrender the policy or continue to perform the insurance contract. If the insured does not wish to continue, the cash value refunded by the insurer should be divided as marital property; if the insured wishes to continue, the insured shall pay half of the policy’s cash value to the other spouse.

If one spouse is the insured and the other spouse is the beneficiary, at the time of divorce, the spouses may agree to surrender the policy or continue to perform the insurance contract. If they agree to surrender, the cash value refunded by the insurer should be divided as marital property; if they agree to continue, the spouse who obtains the insurance benefits shall pay half of the policy’s cash value to the other spouse. If the insured requests surrender while the beneficiary requests continuation, the insurance contract shall continue to be performed, and the spouse who obtains the insurance benefits shall pay half of the policy’s cash value to the other spouse.

Regarding this issue, this article considers it inappropriate to uniformly treat the policy’s cash value as the object of division of insurance benefits. Taking personal insurance where both the insured and the beneficiary are one spouse as an example, the early-stage cash value of this type of insurance is generally low. If one spouse exploits this characteristic, using marital property to purchase insurance for themselves and pay high premiums without the other spouse’s consent, yet only needs to compensate a relatively small amount of cash value upon division, this would be unfair to the other spouse and may also lead to chaos where individuals use insurance products to covertly transfer marital property.

In summary, this article believes that a more reasonable approach is: if both spouses agree to surrender the policy, divide the policy’s cash value after surrender; if either spouse chooses not to surrender, in principle, they should compensate the other spouse with half of the policy’s cash value. However, if there is evidence that the other spouse intentionally concealed the purchase, purchased insurance without authorization, and at the time of divorce, the policy’s cash value is significantly lower than the premiums already paid or the duration of the insurance purchase is less than a certain number of years (2 to 3 years is considered appropriate), the other spouse should be compensated with half of the premiums.

④ Insurance purchased before marriage, but part of the premiums paid from marital property after marriage

In principle, the insurance benefits belong to the pre-marriage insured spouse, but the premiums paid after marriage should be deemed marital property. If both spouses agree to surrender the policy, the cash value corresponding to the portion of premiums paid after marriage should be divided as marital property; if the pre-marriage insured spouse chooses not to surrender, that spouse should compensate the other spouse with half of the policy’s cash value corresponding to the premiums paid after marriage. If there is a significant discrepancy between the policy’s cash value and the premiums, the other spouse should be compensated with half of the premiums paid after marriage.

IV. Conclusion

This article discusses the division of commercial insurance property rights and interests in divorce disputes based on existing theories, laws and regulations, normative opinions, and judicial precedents. However, since some issues are currently controversial and the number of available judicial precedents is relatively small, the views expressed in this article are intended to serve as a starting point for discussion. Please kindly correct any inaccuracies.

Legal Provisions (Scroll up and down to view more):

Civil Code of the People’s Republic of China

Article 1062 The following property acquired during the marriage relationship shall be the marital property, jointly owned by the spouses:

(1) wages, bonuses, and compensation for personal services;

(2) income from production, operation, and investment;

(3) income from intellectual property rights;

(4) property inherited or given as a gift, except as provided in item (3) of Article 1063 of this Code;

(5) other property that should be jointly owned.

Spouses have equal rights to handle marital property.

Article 1063 The following property shall be the separate property of one spouse:

(1) pre-marriage property of that spouse;

(2) compensation or damages received by that spouse for personal injury;

(3) property determined by a will or gift contract to belong only to that spouse;

(4) daily necessities exclusively used by that spouse;

(5) other property that should belong to that spouse.

Article 1065 A man and a woman may agree that the property acquired during the marriage relationship and pre-marriage property shall be owned separately, jointly, or partially separately and partially jointly. The agreement shall be in writing. If there is no agreement or the agreement is unclear, the provisions of Articles 1062 and 1063 of this Code shall apply.

An agreement between the spouses regarding property acquired during the marriage relationship and pre-marriage property is legally binding on both parties.

If the spouses agree that property acquired during the marriage relationship is owned separately, and one spouse incurs debts in his or her own name, the creditor shall be repaid with that spouse’s separate property if the creditor is aware of the agreement.

Interpretation of the Supreme People’s Court on the Application of the Marriage and Family Section of the Civil Code of the People’s Republic of China (I)

Article 26 Income derived from one spouse’s separate property after marriage, except for natural fruits and natural appreciation, shall be deemed marital property.

Insurance Law of the People’s Republic of China (Revised in 2015)

Article 2 For the purposes of this Law, “insurance” refers to a commercial insurance act whereby the insured pays premiums to the insurer according to the contract, and the insurer assumes liability to compensate for property losses caused by the occurrence of possible insured events as agreed in the contract, or to pay insurance proceeds when the insured dies, is injured, becomes ill, or reaches the age, term, or other conditions agreed in the contract.

Article 12 At the time of concluding an insurance contract, the insured of personal insurance shall have an insurable interest in the insured.

At the time of the occurrence of an insured event, the insured of property insurance shall have an insurable interest in the subject matter of insurance.

Personal insurance is insurance with a person’s life or body as the subject matter of insurance.

Property insurance is insurance with property and related interests as the subject matter of insurance.

“Insured” refers to a person whose property or person is protected by the insurance contract and who has the right to claim insurance proceeds. The insured may also be the beneficiary.

“Insurable interest” refers to an interest recognized by law that the insured or beneficiary has in the subject matter of insurance.

Article 31 The insured has an insurable interest in the following persons:

(1) himself or herself;

(2) spouse, children, and parents;

(3) other family members and close relatives other than those mentioned in the preceding paragraph who have a relationship of support, maintenance, or fosterage with the insured;

(4) workers who have a labor relationship with the insured.

In addition to the provisions of the preceding paragraph, if the insured agrees that the beneficiary applies for the contract on his or her behalf, it shall be deemed that the beneficiary has an insurable interest in the insured.

If, at the time of concluding the contract, the beneficiary does not have an insurable interest in the insured, the contract shall be invalid.

Article 39 The beneficiary of personal insurance shall be designated by the insured or the beneficiary.

If the beneficiary designates the beneficiary, the consent of the insured is required. If the beneficiary insures workers who have a labor relationship with him or her, no person other than the insured’s close relatives may be designated as the beneficiary.

If the insured is a person without civil capacity or with limited civil capacity, the guardian may designate the beneficiary.

Article 95 The business scope of an insurance company:

(1) personal insurance business, including life insurance, health insurance, accident insurance, and other insurance businesses;

(2) property insurance business, including property loss insurance, liability insurance, credit insurance, guarantee insurance, and other insurance businesses;

(3) other insurance-related businesses approved by the insurance regulatory authority under the State Council.

An insurer shall not concurrently operate personal insurance business and property insurance business. However, a property insurance company may, with the approval of the insurance regulatory authority under the State Council, operate short-term health insurance business and accident insurance business.

An insurance company shall engage in insurance operations within the business scope approved by the insurance regulatory authority under the State Council.

Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Insurance Law of the People’s Republic of China (III) (Revised in 2020)

Article 2 If the insured notifies the insurer and the beneficiary in writing to revoke their consent expressed in accordance with the first paragraph of Article 34 of the Insurance Law, it may be deemed as a rescission of the insurance contract.

Minutes of the Eighth National Conference on Civil and Commercial Trials (Civil Part) of the Supreme People’s Court

Paragraph 2 (II) Issues concerning the determination of marital property

4. If, during the marriage, an insurance contract is insured with marital property, where the insured and the beneficiary are both one spouse, and at the time of divorce, the contract is still within the insurance period, if the insured does not wish to continue the insurance, the cash value refunded by the insurer shall be treated as marital property; if the insured chooses to continue the insurance at the time of divorce, the insured shall pay half of the policy’s cash value to the other spouse.

5. During the marriage, insurance proceeds of a personal nature obtained by one spouse as the insured under an accident insurance contract or a health insurance contract, or insurance proceeds obtained by one spouse as the beneficiary under a life insurance contract with death as the payment condition, shall be deemed separate property, unless otherwise agreed by the parties.

During the marriage, insurance proceeds obtained by one spouse under a cash-value insurance contract with payment conditioned on survival to a certain age shall be deemed marital property, unless otherwise agreed by the parties.

Guidelines for the Trial of Family Dispute Cases (Marriage and Family Section) Issued by the First Civil Division of the Jiangsu High People’s Court

Article 43 How should personal insurance contracts be handled in divorce cases?

Personal insurance is divided into life insurance, accident insurance, and health insurance. In divorce cases, unless otherwise agreed by the parties, personal insurance contracts may be handled according to the following different situations:

(1) Where insurance proceeds have already been obtained

During the marriage, insurance proceeds obtained by one spouse as the insured under an accident insurance contract or a health insurance contract are mainly used for specific purposes such as treatment and living expenses of the injured party, have a personal nature, and shall be deemed separate property. Insurance proceeds obtained by one spouse as the beneficiary under a life insurance contract with death as the payment condition, where the designation of the beneficiary in the insurance contract itself indicates a specific relationship between the beneficiary and the insured, reflecting the exclusivity of the insurance proceeds, shall be deemed separate property. During the marriage, insurance proceeds obtained by one spouse under a cash-value insurance contract with payment conditioned on survival to a certain age have a certain investment attribute, and the investment income derived therefrom shall be deemed marital property.

(2) Where insurance proceeds have not yet been obtained

For personal insurance contracts insured with marital property during the marriage that are still within the effective period at the time of divorce, if the spouses claim to divide the policy’s cash value, such claims shall be supported. If both the insured and the beneficiary are one spouse, at the time of divorce, the spouses may agree to surrender the policy or continue to perform the insurance contract. If the insured does not wish to continue, the cash value refunded by the insurer shall be divided as marital property; if the insured wishes to continue, the insured shall pay half of the policy’s cash value to the other spouse. If one spouse is the insured and the other spouse is the beneficiary, at the time of divorce, the spouses may agree to surrender the policy or continue to perform the insurance contract. If they agree to surrender, the cash value refunded by the insurer shall be divided as marital property; if they agree to continue, the spouse who obtains the insurance benefits shall pay half of the policy’s cash value to the other spouse. If the insured requests surrender while the beneficiary requests continuation, the insurance contract shall continue to be performed, and the spouse who obtains the insurance benefits shall pay half of the policy’s cash value to the other spouse.

(3) Handling of personal insurance purchased for minor children

During the marriage, insurance proceeds obtained from personal insurance purchased by one or both spouses for a minor child shall belong exclusively to the minor child if the minor child is not deceased. At the time of divorce, if the personal insurance contract purchased for the minor child is still within its effective period, since the ultimate benefits of the insurance belong to the minor child, the insurance shall be deemed a gift to the minor child and shall no longer be divided as marital property.

Reference Cases:

1. Civil Judgment No. 1109 (2021) Chuan 1381 Min Chu, Langzhong City People’s Court, Sichuan Province.

2. Civil Judgment No. 3185 (2021) Yue 01 Min Zhong, Guangzhou Intermediate People’s Court, Guangdong Province.

3. Civil Judgment No. 2483 (2018) Zhe 06 Min Zhong, Shaoxing Intermediate People’s Court, Zhejiang Province.

References:

1. Wen Shiyang, ed., Insurance Law, Beijing: Law Press, 2007.

2. Wu Yiwen, “The Legal Logic and Normative Application of the Division of Commercial Insurance Rights and Interests in Divorce,” Modern Law Science, Issue 2, 2024.