Dealing With Insurance After Divorce

Most people never think about insurance until it is absolutely necessary, regardless of whether it is life, health or homeowner’s insurance. All of these tend to be forgotten or swept to the side in the event of a divorce. Divorces can be bitter, drawn out, and very expensive for both parties. Afterwards, there are often new things to pay for like child support and alimony. When going through a divorce, it is important not to forget the most important assets of all: your life and well-being, ie, your health. These two variables are direct factors in your potential to earn income in the future and to take care of yourself as well as your family, so managing these options are a crucial component.

In general, most couples name one another as the beneficiaries in case of death in their life insurance policies. In the event of divorce, you may need to change the person designated as your beneficiary on all of your policies. Additionally, the amount of the coverage should be adjusted, especially if you are the spouse that was without a job and now have to enter the workforce. New factors to consider in an impending divorce include supplementing income, getting rid of debt, and leaving enough money to care for family in the case of death. Your ex-spouse should buy and maintain a life insurance policy and it is essential that the policy is large enough to protect the entire family in the event of a death or accident.

One question that is placed is how much insurance coverage does an ex require? To reach this amount, an accountant can add all the payments the ex is expected to receive over the course of a year and then divide that amount by 0.04. This total is the amount necessary to replace the payments.

Other variables that may not affect everyone are the laws that are to be followed depending on the state in which you divorce in. Certain states remove ex-spouses from all interest in the other spouse’s property, which also extends to life insurance benefits.

Health insurance is usually offered with employment, but as the spouse that is not employed will no longer be identified as the dependent on a plan, they are at risk. If you are employed and your company offers health insurance, the option remains to have insurance through your employer without the added hassle of waiting for an enrollment period. It is necessary to contact the insurance carrier and ask for a certificate of insurance that validates your insurance status so you cannot be removed or hit with an increased premium for pre-existing conditions.

For those that are without an employer, this same definition makes you eligible for COBRA insurance.  Many find COBRA insurance to be one of the more expensive options available as it requires payment of the full premium. Also, it is considered a temporary solution. There are other options available out there, as many professional groups and organizations offer insurance that you may qualify for. Private health insurance is also an option, but this is also very expensive, typically higher than a group policy.

Every year, 12% of American adults are classified as a long-term disability. One out of every seven American will experience a period of disability that lasts longer than five years before they reach the retirement age of 65. Under a two income system, there is more protection if you remain unemployed because of a disability, whether it is short-term or long-term. If you are single, disability coverage can be an option to think about either privately or with your employer, especially if you do not have any savings plan to additional income to draw upon.