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Insurance Policies -- Part
VI
Having the proper insurance is key to your peace of mind and financial health. In order to safeguard that you and your children will be covered both during your divorce and afterward, it is important that you sort out your policies from your spouse's.
Can I stay on my spouse's policy or do I need to get my own?
Depending on the type of coverage you have, you may or may not be able to remain on your spouse's plan. - Because the rules vary greatly from plan to plan, you'll have to first check with your insurance provider to find out what options are available to you.
- You'll need to discuss with your lawyer what changes, if any, you intend to make to your insurance policies.
Getting your own insurance
If you do in fact need to get your own insurance, here are a few things you should know: - Group rates are cheaper than individual ones, so if your employer offers insurance, you should probably think about signing up.
- Life events like death, divorce, marriage, or a child's birth let you sign up mid-year for insurance.
- Insurance is usually negotiated as part of the divorce settlement.
Changing your existing policies
Your spouse is commonly the beneficiary on your insurance policies and retirement plan, so you'll most likely want to change that immediately. If your spouse has power of attorney over any separate accounts that are in your name only, you'll probably want to change that too.
Life and health insurance
Life and health insurance are the most common shared policies among married couples. You probably have joint policies with your spouse that you will need to sort out.
1. Life insurance
With life insurance, ownership of the policy is of particular importance. - The person who controls the policy can choose the beneficiary.
- Often if one party is paying child support and/or alimony, the courts will require this party to make life insurance payments for the ex-spouse and children.
- How you handle your life insurance depends very much on what type of policy you own. For example, if your policy has a cash value, like whole life policies, it may be considered an asset in the divorce settlement process.
2. Health insurance
In most cases, once the marriage is dissolved any joint health insurance is terminated as well. - If your health insurance was provided by your spouse's plan then you may be able to continue your coverage with COBRA. The Consolidated Omnibus Budget Reconciliation Act (COBRA) says you can continue the same coverage for at least eighteen months as long as you pay the premiums. Keep in mind that premiums may change if you remain on your spouse's plan through COBRA.
- Coverage for children can continue on some employer-provided plans. You should check with your individual policy to be sure of the rules that govern your plan.
HerTip: You may want to look into your automobile policy as well. For more information, go to our auto insurance center.
Continue to:
Part VII: Social Security
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