Some life insurance policies have cash value, which means that the owner can borrow money from the policy.  Other policies, such as term insurance, have no cash value.  Any settlement agreement should address who will own the existing life insurance policy and who will be named as an irrevocable beneficiary of the plan.  If the noninsured spouse is supposed to be the beneficiary, then the best way to protect the noninsured spouse is to have the noninsured spouse own the policy.