There is one area that many people getting divorced don’t realize needs their attention: their insurance policies. When you part ways with your spouse you will need to make changes to your policies. What follows are tips about five insurance changes that you’ll need to look at right after you get a divorce.
Matters related to insurance can be difficult enough to sort through in normal times. When you’re in the middle of a divorce, your insurance can get much more complicated. It’s important to pay attention to the details and to make sure that you get them right.
If you owe child support payments or alimony to your ex-spouse, your divorce agreement may seek to make sure that there will be money even if you happen to pass away. Under the agreement, you may be required to buy life insurance, and name your ex-spouse as the beneficiary.
A term life policy is an affordable way to get the life insurance that you need when you go through divorce. You can choose the number of years that you need coverage for, and the level of coverage that you require.
If you owe no alimony or child support, but you already do have a life insurance policy in which your ex-spouse is the beneficiary, you may want to contact the insurance company and have their name removed.
While disability insurance is often overlooked, financial advisors consider it just as important as life insurance. The odds of becoming disabled for twelve weeks or longer before you reach retirement age are greater than the odds of dying before that age.
It’s a good idea for couples to talk about disability insurance before they finalize their divorce. Just as with life insurance, divorce agreements often require that the spouse paying alimony or child support buy disability coverage to enable them to keep paying what they owe in the event of a disability.
If you are a dependent on the health plan that your spouse receives from work, you won’t be able to receive care under that plan once the divorce goes through. You’ll need to do one of the following:
- You may be able to sign up for health insurance with your own employer. If you lose insurance by your spouse, you will be able to sign up to your employer’s plan outside of the regular enrollment period.
- You may be able to buy insurance at the health insurance marketplace for your state or purchase coverage directly from an insurance company.
- You may be able to continue under your ex-spouse’s work-sponsored health insurance, but you need to pay for it. You simply need to choose to buy health insurance under the Consolidated Omnibus Budget Reconciliation Act, or COBRA.
Once you decide who gets the family cars in the divorce, you’ll need to make sure that the changes reflect in your car insurance policies. You should contact the insurance carrier, and ask them to remove the name of your ex-spouse as a driver of the car that you will keep. If you insured multiple cars in the family with the same insurer, it’s likely that you paid discounted premiums. Since you won’t have the benefit of those discounts anymore, you’ll need to shop around for the best price.
If there are kids who drive the cars of both parents, you’ll need to make sure that they are on all the policies.
When one spouse moves out of the house following the divorce, you should let your home insurance company know that they no longer live there. Once the divorce is final, the home insurance policy should only be in the name of the homeowner.
If you need to move out and find your own apartment after your divorce, you’ll need to buy renters insurance. It’ll cover you in the event of loss of your belongings, if you need to stay somewhere else when there is work being done on your apartment, or if someone sues you for an injury suffered while they are in your apartment.
Pav Lertjitbanjong, CDC Certified Divorce Coach®, Data Scientist, MBA – MyCoachPav
Pav Lertjitbanjong is on a mission to help people make better decisions in divorce and in life so they can love and live fearlessly again. She is a Data Scientist and Certified Divorce Coach at MyCoachPav.com. She also runs Our Divorce Stories channel on YouTube. Connect with Pav about Divorce Coaching and get her expert divorce advice via LinkedIn and Facebook.
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