Dealing With Insurance Policies During Divorce
Jan 18, 2021
In most families, couples have intertwining insurance policies. For example, you may share some policies or designate each other as beneficiaries. In such a case, you may need to extricate from each other's insurance policies if you divorce. You must handle the extrication delicately, fairly, and follow existing laws.
Below are tips for handling some common insurance policies during a divorce.
Car Insurance The first thing to note is that you can't remove your former spouse's name from the policy without their consent. The insurance company won't allow it. Here are a few tips for dealing with auto insurance during a divorce:
Hopefully, the divorce decree will address the issue of car insurance, and you shouldn’t run into complications if your ex-spouse is cooperative. However, you can always seek the court's help if your ex-spouse is difficult.
Health Insurance Health insurance is critical since you can fall ill at any time, so you shouldn't go even a day without coverage. Luckily, there are laws in place to ensure that doesn't happen. But your post-divorce health insurance options depend on your existing coverage. In many households, one spouse relies on their partner's health insurance. In such a case, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue with the existing coverage for at least three years .
Other options include:
If you have kids, the ideal thing is to agree on their health insurance after the divorce. The court will settle the issue for you, just as it will do for other divorce issues if you don't agree. For example, the court may order you to:
A family attorney can assess your situation and advise you on the best healthcare plan after your divorce.
Life Insurance When it comes to life insurance, your beneficiary designations will probably change during your divorce. For example, many couples name each other as primary beneficiaries in their life insurance policies. If that's the case, you may want to delist your spouse as a beneficiary. Otherwise, your former partner may still get the benefits after your demise.
The court may also have a say in your life insurance policy. Say you have minor children who require child support. The court may require you to maintain a life insurance policy that covers child support.
Additionally, if your life insurance policy has accumulated some cash value, the money is part of your marital assets. The court will divide the money equitably between the two of you.
Divorce can be inexpensive if you go about it the right way. At Budget Divorce Center, we strive to make your divorce as simple and affordable as possible. We have been helping families with family law issues for over twenty years. Contact us for a consultation so we can determine the best way to help you.
Below are tips for handling some common insurance policies during a divorce.
Car Insurance The first thing to note is that you can't remove your former spouse's name from the policy without their consent. The insurance company won't allow it. Here are a few tips for dealing with auto insurance during a divorce:
- Wait until you finalize the divorce. At that point, you will move into separate households (addresses) and disassociate from each other's liability exposure.
- Address the issue of car division. If you have one car, the person who gets the car should have their name on its title. If you have multiple cars, each person should have their name on their car.
- Ensure you get a new policy before you cancel the existing one. Otherwise, you might incur a gap in coverage, which insurance companies frown upon.
- Cover your teenaged drivers. If you have teenage drivers, place them on the custodial parent's policy.
Hopefully, the divorce decree will address the issue of car insurance, and you shouldn’t run into complications if your ex-spouse is cooperative. However, you can always seek the court's help if your ex-spouse is difficult.
Health Insurance Health insurance is critical since you can fall ill at any time, so you shouldn't go even a day without coverage. Luckily, there are laws in place to ensure that doesn't happen. But your post-divorce health insurance options depend on your existing coverage. In many households, one spouse relies on their partner's health insurance. In such a case, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue with the existing coverage for at least three years .
Other options include:
- Medicare if you are 65 or older
- Medicaid if you are eligible
- Private health insurance if you wish and can afford it
If you have kids, the ideal thing is to agree on their health insurance after the divorce. The court will settle the issue for you, just as it will do for other divorce issues if you don't agree. For example, the court may order you to:
- Keep the kids on an employer-provided health plan, if you have one
- Purchase private health insurance for the kids
- Share out-of-pocket medical costs, such as co-pays
A family attorney can assess your situation and advise you on the best healthcare plan after your divorce.
Life Insurance When it comes to life insurance, your beneficiary designations will probably change during your divorce. For example, many couples name each other as primary beneficiaries in their life insurance policies. If that's the case, you may want to delist your spouse as a beneficiary. Otherwise, your former partner may still get the benefits after your demise.
The court may also have a say in your life insurance policy. Say you have minor children who require child support. The court may require you to maintain a life insurance policy that covers child support.
Additionally, if your life insurance policy has accumulated some cash value, the money is part of your marital assets. The court will divide the money equitably between the two of you.
Divorce can be inexpensive if you go about it the right way. At Budget Divorce Center, we strive to make your divorce as simple and affordable as possible. We have been helping families with family law issues for over twenty years. Contact us for a consultation so we can determine the best way to help you.
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