If you are going through a divorce, one of the things that you may think about is how your divorce can affect your insurance choices such as your health insurance policy and your life insurance policy. You are right to question this as a substantial life change such as a divorce will bring about the need to assess a person’s finances and insurance is an important aspect of the financial reassessment.
In order to begin organizing your divorce settlement for your insurance needs you will want to make a list.
To start organizing your divorce insurance reassessment you will first want to review all of the insurance policies that you had during your marriage. You will then need to decide which of the policies that you are still going to need. Next, determine how each member of the family will have their health insurance provided. Finally, determine the additional insurance coverage is going to be needed or wanted once your spouse is gone.
Here are a few suggestions about what you may need to change or add to each area for your insurance reassessment during a divorce.
Health Insurance and Divorce
After the divorce it is very important to make sure that each person in the family will still have health insurance. Do not worry about just yourself and the children. It is also important to make sure that your spouse is adequately insured as well since they are going to be a part of the financial future and the overall well-being of your children.
If you do not have health insurance through your work, you might be able to get your coverage through a COBRA plan if your spouse had an insurance plan for you in the past. If this is not available, you may want to consider an emergency policy that has a deductible that is larger or is just for a short term. You should try to not have any type of gap in your policy as this may cause issues if it is determined that you have a medical condition as this could be labeled as a pre-existing condition, which could lead to you not getting coverage or paying higher premiums for coverage.
If both parties have insurance through work, determine which person is going to be the main carrier and who will be the secondary carrier. The person that is the secondary carrier will cover the costs that are not covered by the primary carrier. Many insurance companies will use the birthday rule. this means that the parent who has a birthday first during the calendar year will carry the primary policy. However, this is not the law and you can make the choice yourself.
Home and Renter’s Insurance After A Divorce
If you are staying in the home after you get divorced you will want to make sure that you get the homeowners insurance changed to your name only. You will also need to review the type of coverage that you have. Look to see if you have a replacement cost coverage or a cash value in regard to covering the contents of your home. Actual cash value will provide you with the amount that your contents are worth in today’s market, where replacement cost coverage will give you the amount to replace the products when they are lost. You may want to consider paying for replacement coverage now that you are single.
Additionally, you will want to see how much the deductible for the policy is. A lower deductible means a higher premium and a large deductible can save money for the policy. Depending on what your situation is, a lower deductible might be a better option for some where a lower premium could be the best option for others.
Car Insurance After A Divorce
You are going to need to have your spouse removed from the car insurance policy. This could change your premium. Talk to your agent to see the options that are available to you in regard to your policy. You may want to add in rental reimbursement, towing, and roadside assistance as these can all be beneficial.
Life Insurance And Divorces
You will now need to go over the beneficiary details of a life insurance policy. You may also want to consider an increase in the amount of your coverage. This is especially important for individuals that are the primary support for the children. If you do not have life insurance, it is definitely time to consider a policy. A term life police will be a good choice to carry until at least the time your children finish college. It will be the most cost effective option when it comes to life insurance policies.
You may also want to consider umbrella insurance policies or long term care policies. When you are reviewing your divorce insurance reassessment, make sure that you talk with your insurance agent about annuities as these could really help when it comes to your future retirement funds.