Why would you not let your wife have the money? When you die, your ex will have the kids, then who wil take care of the kids if the money doesnt go to the person who is your kids parent/gardian? A person takes a life insurance policy for the security of their family. I would let my kids have that money rather than give it to other family member who could most definitely be greedy and change their mind and take that money and run. For my kids security I would trust that my ex would be the most appropriate person to be the beneficiary.