One of the main themes of this blog will not just be to make you hate insurance companies but to suspend your belief of them when you talk with them. Insurance companies could not possibly give out great deals to everyone, because then they would never make any money. Sure, you need insurance, but there are types of insurance that are a huge waste of money (we will get into those later). What you need to do is identify what you need for your insurance, and let your agents know your expectations heading in. If you find yourself believing everything your agent tells you, please remember this video. Just like with any other product, it is in your best interest to be an informed consumer when you make the decision to purchase insurance. If you don’t do so, you will either wind up woefully underinsured or grossly over-paying. Neither of those sound very good to us.
The United States was subjected to a financial crisis in 2007 through to 2010 under the Obama administration. As a result, the government was required to bail out financial institutions to the amount of several trillion dollars throughout the nation. It was regarded as the worst financial crisis the country had endured since the Great Depression nearly 80 years prior. Amid this crisis, President Obama proposed a bill that would dramatically alter the regulatory systems of the financial industry. It would later come to be known formally as the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The main purpose of this legislation was simply to protect American taxpayers in the event of another financial crisis, that they would not suffer the brunt of the repercussions if Federal banks required another bailout such as that required in the preceding financial crisis. It consolidated and employed new agencies to oversee specific institutions that were seen as a “systemic risk.” It increased transparency and put in safeguards and warning systems regarding the stability of the economy. It also closed legislative loopholes that were said to be at fault for the financial crisis of 2007.
However, there are those in the Trump administration, including President Trump himself, who are strongly opposed to this legislation. The administration claims that it impacts banks negatively by discouraging loan approvals, and thus it impacts the consumer at the base level negatively as well. Those who might seek personal loans for expenses or to start businesses and create jobs, those who have established businesses that may wish to expand and create more jobs, are impacted negatively as a result of the Dodd-Frank Act.
While many are focused on the protections afforded the United States citizens and whether or not they conflict with the forward interests of American financial institutions, there are some who wonder at the implications of the insurance sector rather than strictly the financial sector. Would the Dodd-Frank Act alter the methods of operation for a state-based insurance industry? Would President Trump consider these implications in his effort to repeal or modify the Act? Many believe the President agrees with and supports entirely the notion of the state-based industry considering he has not yet spoken out against it.
The Financial CHOICE Act would effectively negate many of the items put forth in the Dodd-Frank Act. Its goal would be to give more freedom to the financial institutions by simplifying the processes of regulation and encouraging competition while maintaining consumer protections and restricting government bailouts to the financial institutions. Though, some believe that there is still not enough reform to the insurance industry. Or at least, not enough assurance for the current maintenance of the state-based insurance industry. The only significant change proposed in the Financial CHOICE Act bill was the merger of two positions within the hierarchy. There is also speculation of insurance companies which maintain the classification of SIFI (Systemically Important Financial Institutions) – and are therefore affected by articles in the Dodd-Frank Act – to have this label rescinded based on a court case brought forth by MetLife.
While the Trump administration has focused more intently on health care reform in the past months, there is still a focus on dismantling Dodd-Frank, and only time will tell if the the Financial CHOICE Act that hopes to repeal and replace it will include significant insurance reform as well.
What Happens to Insurance After A Divorce?
Apprising and dividing your assets is something that comes with getting a divorce. But what happens to your insurance? Do you keep it? Do you have to pay for your ex-spouse’s insurance? Depending on the type of insurance, you may be allowed to stay on the same plan as you ex-spouse or you may have to enroll in your own plan.
Health insurance is something that should be discussed in the divorce settlement. If your ex-spouse provides insurance for you and your children, if you have children, you can fight for your spouse to keep you on their plan in the divorce settlement. If you are the spouse that provides your family with health insurance, you may be charged an extra premium every month for your ex-spouse and children, if there are any involved.
Another aspect of health insurance that needs to be discussed in the divorce settlement is COBRA. COBRA is only applicable in a situation where the employer has 20 or more employees. Cobra allows you to stay on your ex-spouse’s plan for up to 36 months. It may not be all it’s cracked up to be, you will be responsible for paying the full premium for your coverage without any help from the employer. The administration that provides the insurance must be notified within 60 days of the divorce or legal separation.
After creating your post-divorce budget, you may find it to be cheaper to either inquire with your employer about their insurance packages or to get your own insurance. Your best bet financially is if your employer provides health insurance benefits. Signing up for your employer may allow you to get better coverage with some and provide some financial relief with your employer taking on part of the monthly cost.
In the event of a divorce, your ex-spouse and yourself may need to open a new life insurance policy. If there are financial agreement, like alimony or child support, included in the divorce settlement, you may want to require your ex-spouse to list you as a beneficiary. This is important because, in the event of his/her death, the payout from life insurance can be used in replace of child support or alimony. If there are no financial agreements in place, you do not have to list your ex-spouse as a beneficiary and if you already have a plan, you can remove them as a beneficiary.
According to the American Institute of CPAs, disability insurance should be a top priority for anyone who collects an income. Did you know it is more likely for an individual to be disabled for 90 days than it is to for an individual to die before retirement? Disability insurance is in place to pay you in the event of an injury that prevents you from working and collecting an income. If you are financially dependent on your ex-spouse (relying on alimony and child support), you may want to include a require the to have disability insurance.
After you decide on where the cars are going, you are going to have to get a separate policy from your ex-spouse. When you and our ex-spouse purchase separate policies, you are going to lose discounts that go along with being married. If there are any teen drivers in your household, it is advised that they are included in both policies.
Home insurance is one of the less complicated policies to figure out. If you are awarded the home in the divorce, then you will be required to pay for the home insurance policy. If you are moving to an apartment, you might want to look into renters insurance. Renters insurance covers both your belongings, liability and damages. Liability includes if someone is injured and your apartment. Damages can include a broken window or damage from a disaster, such as a fire.
Going through a divorce is complicated and can take a toll on you, both physically and emotionally. You are going to need help getting your new life set up. You may have been covered by your spouse’s insurance policies for the tenure of your marriage, but now you want to know where to go for insurance. Contact one of our family law attorneys; they have the expertise necessary to help smooth the transition from married life to post-divorce life.