As any divorce comes with a litany of loose ends that need shoring up, insurance is something that can easily become an afterthought. This can be more complex where children are involved, and it’s vital that you create a plan. Below we discuss the different types of insurance, and share some tips on how to handle them during and after divorce.
Life Insurance
If you have life insurance, you may be able to leverage it in your settlement. Even if the policy isn’t valuable in terms of cash, the coverage itself does hold value.
If there is cash value in your policy, this is also part of the divorcing couple’s net worth. In a collaborative divorce, the cash is often split evenly.
If you will be receiving child or spousal support, it’s a good idea to protect yourself by negotiating for your ex-spouse to make you the beneficiary of their life insurance policy. This ensures that you receive the financial support you need, even if your ex-spouse is no longer living. If no life insurance is in place today, or if your spouse does not want you to be the beneficiary, you should investigate a life insurance policy that you own that insures your ex-spouse. This will need to be negotiated during your settlement to ensure everyone is willing to cooperate with changing beneficiaries or going through underwriting for new insurance.
Long Term Care Insurance
Most of us, while married, simply assume our spouse will care for us if we can no longer take care of ourselves. Or, we trust they will make the best decisions on our behalf when it comes to long term care. After a divorce, it becomes much more important that you protect yourself by ensuring that should something happen, you’ll be well cared for.
It’s worth noting that Medicare won’t cover your long term care needs, so it’s important that you create a plan for this.
Health Insurance
Sorting out health insurance is paramount, especially if you have children. If you’re currently on your spouse’s health insurance plan, it’s time to start looking for alternatives. Check first with your employer as there may be a plan you qualify for.
If you don’t qualify for benefits at work or you’re not working, know that you could stay on your ex-spouse’s plan for up to 36 months via COBRA. This comes with a caveat though: premiums are often much steeper through COBRA, so if you go this route, be prepared for a monthly cost increase.
You can also look into private plans that are offered through the Affordable Care Act.
In some states, a spouse is required to maintain the couple on his or her insurance until the divorce is finalized. Additionally, some courts may require that both parties are entitled to the current insurance plan until the proceedings have wrapped up.
Auto Insurance
After the divorce, notify your provider that you are no longer married and wish to separate your policies. You can cancel your current policy and create a new one, or remove your ex-spouse from an existing policy.
Know that your premiums could change as a result. For example, single men and women typically pay more for insurance than a married couple, because studies have shown that married couples are less likely to experience an accident.
It’s important you remove your name from any vehicles you don’t own, so you’re not liable in the event of a car accident.
Seeking Help
As you can see, there’s a lot to cover during and after the divorce, and your situation is likely very different from everyone else’s due to your unique set of circumstances.
Alternative Divorce Solutions helps ease the burden by creating the best path forward for you. If you want to learn more, we encourage you to contact us at 877-471-4654, or visit our services page to see all the ways we can help.
