Divorce and insurance: Don’t get caught unaware

When people are going through a divorce, one thing that they should not overlook is the changing of their insurance policies.

Divorce comes with many changes for people in Meridian. There is often the need to find a new place to live, search for a new job that will support a single parent's needs, divide marital property, arrange custody agreements, change one's last name back to the former one, and decide on child support and possibly spousal support.

At Fisher Law Office, PLLC, we often see spouses make the mistake of forgetting to update their insurance policies to reflect their new single status. However, failing to do so could get the spouse holding the policy in legal trouble and leave the spouse receiving the benefits without any real protection.

Autos and homes

These insurance policies should be updated as soon as possible and it is also important for spouses to consider the financial impact of these policies on their budget. Once spouses have made the decision to file for divorce or separation, they should meet with their insurance agent and take the necessary measures to set up a brand new policy in their name and have their name removed from the current policy. Some insurance companies may require legal documentation or the authorization of both spouses listed on the policy before they will make the change.

Spouses who are moving out should also consider getting renters insurance if they are planning to live in an apartment or a rental home. This insurance is relatively inexpensive and can provide them with some security in the event of a fire or other disaster.

Health

Health insurance is perhaps the most difficult insurance policy to deal with in a divorce. Reuters points out that failing to remove an ex-spouse from a health insurance plan is a bad idea. It could lead to allegations of insurance fraud and the ex-spouse could suddenly lose benefits. It is estimated that the monthly cost of insurance for someone who recently went through a divorce is around $300. However, if people can show that they are financially struggling, they may be able to qualify for Medicaid.

For other spouses, they do have the option to sign up for COBRA insurance but it can be extremely expensive and it only will cover them for a certain amount of time. If there are children, parents will need to decide how the costs will be divided between them.

Life insurance

If spouses are recipients of alimony or child support payments, Fox Business recommends that they should establish a life insurance policy on the other spouse. The policy will continue to provide for the needs of the ex-spouse and the children if the other spouse dies in a traffic accident or from an illness. If spouses already have life insurance policies, the spouse named as the recipient should have ownership of that policy transferred to him or her to prevent the other spouse from stopping the policy or changing the designated beneficiary.

If people are not using these policies for that purpose, it is important that they change the beneficiary to another family member if they do not want their ex-spouse to get the money. If people in Meridian have questions over the division of assets or other family law matters, an attorney may be able to help them.