What Happens to Insurance After A Divorce?

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

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.  

Life Insurance

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.

Disability Insurance

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.

Car 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

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.