Divorce is not easy. It will impact your life in a number of ways. With the end of a marriage, will come the beginning of a plethora of adjustments in one’s life. The transition from a devoted spouse to the life of a bachelor or bachelorette again can bring on several changes. Most are familiar with the monetary and asset divisions that occur, but what about the status of your health, home, life and auto insurance?
When a divorce occurs, several benefits that are awarded to spouses and eligible dependents become ineligible. Due to varying regulations that require insurance to certain aspects of your life, you might find yourself having to look for a number of new insurance companies after a divorce is finalized.
Will I Lose My Health Insurance in a Divorce?
Unlike many other developed countries, the United States does not have a universal health care system in place for their citizens. This means that an individual is responsible for carrying their own health insurance either from a handful of social programs, though employment opportunities, an out of pocket policy or risk not having any health insurance.
What Happens If You’re on an Ex-Spouse’s Healthcare Plan?
To put it bluntly, once a divorce is finalized, the individual on an ex-spouse’s plan will no longer be covered under the former spouse’s health insurance policy. The ex-spouse becomes ineligible for benefits, but additional eligible dependents, like children under the age of 26, can still be covered under a pre-existing health insurance policy.
In the United States, when a divorce is finalized, the former spouse dependent will no longer be eligible for previous health care benefits they had once received. A dependent is defined as “A child or other individual for whom a parent, relative, or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, individuals may be able to claim a premium tax credit to help cover the cost of coverage for themselves and their dependents”.
Once a divorce is finalized, any spouse that was previously covered under an ex’s policy will lose their health coverage. Some of the most common options for health insurance after, or in lieu of a divorce are:
- Coverage Through Employer – If you waived health insurance coverage offered by your employer, you will be eligible for a qualifying life event after a divorce is finalized. This means that, if offered through an employer, you can opt in to the benefits package immediately. This ensures that a divorceé will be eligible immediately for health benefits offered from the employer (assuming the divorceé meets all of the organizations prerequisites).
- COBRA – After the divorce is finalized, the non-insured divorceé can qualify for COBRA benefits. COBRA benefits can cost large amounts of money and have full priced premiums. A COBRA eligible individual can receive health benefits for up to 36 months. The benefits of COBRA allow the ex-spouse to continue the same employer sponsored health program.
- Legal Separation – A legal separation has different regulations compared to a divorce. With benefits and drawbacks of both a divorce and legal separation, a legal separation can permit an uninsured spouse to remain covered under an exes plan. If health insurance is one of the reasons why you and your spouse are still together then a legal separation may be best for your needs. With that said, some insurance carriers view legal separation and divorce as identical, so it is extremely pertinent to ensure the eligibility benefits with a health insurance company before the divorce or separation begins.
Will I Lose My Home Insurance in a Divorce?
According to the Insurance Information Institute (III), divorce and separation generally result in one or both parties finding new residencies. If the homeowners insurance policy is under a different name than the current or future tenant, then the insurance policy provider needs to be alerted of the change.
After the divorce is finalized ensure with the insurance policy provider that you have adequate insurance. During divorces, assets are divided between the parties and insurance companies need to be aware of any of these valuable items.
Since every divorce case is different, some divorceés may need to adjust their existing home insurance policy, get a new one altogether or maybe able to keep their existing policy. Contact a San Diego divorce attorney to learn more.
Will I Lose My Life Insurance in a Divorce?
Married couples frequently buy life insurance policies on one-another to help insure unexpected life changing events from destroying their future. In the event that an insured earner of a household dies, the surviving beneficiaries will have an insurance settlement that pays out.
Frequently, spouses list one another as the beneficiary for life insurance policies. Be wary that adjusting any of the beneficiaries during the divorce proceedings can be harmful to your case. Once a divorce is finalized, you can change the beneficiary of your life insurance policy. The change in beneficiary must be done by the policyholder.
After a divorce is final, both parties need to update their life insurance policies to account for the legal marital status change. Navigating the insurance industry through the divorce process can be convoluted, so it is important to meet with a qualified divorce attorney in your area to address any questions during this difficult process.
Will I Lose My Auto Insurance in a Divorce?
After a divorce is finalized, make sure that your auto insurance provider is alerted of a change of ownership (if applicable) for any cars the two parties purchased as a couple. If you or your former spouse move, a new insurance policy should be taken out as soon as possible. If one, or both, former spouses are planning on purchasing new vehicles, it is best to ensure that the new insurance policy is in place before the new car is purchased. In the event that the former spouse is still on the insurance policy, you may be liable in the event that the other individual is involved in a car accident.
If you have a teenager or another dependent listed on a previous joint insurance policy, verify what cars you want the dependent to drive and ensure that they are properly listed on the new insurance policy.
Contact a Family Law Attorney to Learn More
Regulations vary from state to state, so it is of utmost important to know the local rules and regulations of your state regarding insurance after a divorce. An attorney with experience in family matters can help navigate an individual going through a divorce through this process.
After a divorce several pertinent parties, entities and paperwork need to be informed and completed. This process can be strenuous, but divorce attorneys can help with the process. For assistance with your divorce questions, contact an experienced divorce attorney in your area.