During a divorce, most people focus on asset division, alimony, and child support when it comes to financial issues. Insurance is less often considered, although it too can be drastically impacted by a divorce decree. Nerdwallet offers the following information so you can make the right decisions about insurance coverage as you navigate through the divorce proceedings.
If you have life insurance in place at the time of your divorce, you definitely want to examine beneficiary designations to remove your ex from the document. If you fail to do so, he or she will receive death benefits after you die. If you don’t have a policy in place, the court may order you to establish one and name your former spouse as beneficiary. This is usually the case when a person is obligated to make payments for child or spousal support, as the death benefit will ensure compensation continues even after you’re gone.
If you’re on your spouse’s health insurance plan, you’ll need to make some decisions after divorce. Once the divorce is finalized, you’ll be removed from your ex’s employer-provided plan, which leaves you without coverage. In this case, you can opt for a plan through your employer or sign up for a plan on your own. You can also extend existing coverage for 36 months via COBRA insurance, which helps people retain coverage for a short period after losing insurance.
Whoever gets the family home will also need to change the home insurance policy if both spouses were previously listed as owners. The same changes should be regarding other insured property, such as vehicles. If your ex received ownership of a vehicle you once both owned, make sure insurance documents are changed to reflect the divorce. If you receive the vehicle and your ex was listed as a driver, make sure their name is removed from the policy.