Divorce, Insurance and Your Finances
Going through a divorce is a complicated affair, and those complexities go beyond the dissolving of a relationship. Finances, insurance, housing, and much more will need to be separated and sorted out as you transition back into two households.
What are some of the most important things to remember and track regarding insurance and your finances during divorce?
Having a shortlist of these things can help you keep them in order and ensure that you don’t forget to go over any key factors. Don’t panic; you have what it takes to work through each aspect of this significant life change.
Research Your Health Insurance Changes
If you and your spouse share health insurance coverage through one of your jobs, you will want to find out how that coverage will work after the divorce is finalized. Regardless of what the insurance change will be, you must find out the details before the divorce is completed.
If there is going to be a significant financial issue because of this change in coverage, make sure that health insurance is brought up during divorce proceedings. It is possible that some type of stipend to cover the first few months of new coverage could be included. These are the types of financial considerations you don’t want to miss out on as you approach to divorce.
Specific Insurance, Specific Rules
Some health insurance plans have extensions for ex-spouses that will carry them until they find their own coverage; others will have a specific date that the coverage ends.
The USAA and divorced spouse benefits, for example, are relatively forgiving and will continue to cover an ex-spouse until they remarry.
Find out the rules on your health insurance coverage benefits for ex-spouses so that you can adequately prepare and budget for any future changes in your insurance terms.
Be Patient On Life Insurance Beneficiary Changes
Another thing to think about when you divorce is whether or not you want to change the beneficiary on your life insurance benefits. Many spouses choose to keep their ex-spouse involved in the benefits if they have children together, but this varies on a case-by-case basis.
However, one thing to remember is that you should not make any changes to your beneficiaries until the divorce is finalized. This is because there may be some ruling about your life insurance included in the settlement, so you want to make sure you do not violate those rulings.
If you aren’t sure if you are in the clear to change your beneficiary, contact your lawyer to get their input on if it is the right time or not.
Don’t Forget Your Auto Insurance
If you and your spouse shared auto insurance coverage, this is another plan that will need to be separated. Most companies make this very easy to do, but there may be some change in the rates you pay if you had some type of discount for sharing coverage.
Teen Driver Coverage
One thing that many people forget to consider is car insurance for a child of divorced parents.
If you have teen drivers in the house, it is vital that you make sure they are covered by one or both of your insurance plans after the divorce. Work with your auto insurance company to ensure that they will be covered regardless of which car they are driving in which household.
Teen driving incidents can be costly, so you do not want your teenage driver to be driving uninsured. Even if both you and your ex-spouse have to add your teen driver to your plans, this is better than allowing them to go uninsured.
Do You Have Bundled Insurance?
If you have things like your home and auto insurance bundled, you may not be able to keep the same rates or bundle once your divorce is finalized.
While this is understandable due to the changes in each plan, it’s important to consider for your future budgeting. If you expect to be paying the exact amounts or getting the same deal, you might wind up disappointed.
Predicting your exact future bundle prices won’t be possible, but you can contact your insurance company to see if they can give you estimates. These prices will change over time, but you will set a more realistic budget with this knowledge in hand.
Remember: Every Situation Is Different
Every single divorce is different. Some choose to go through a limited divorce until time has passed, while others have very contentious court battles over shared resources. Either way, the exact way things like insurance and finances will shake out will be different.
For that reason, it’s important to remember that you cannot make changes to things like shared insurance plans until you have permission to do or until the divorce is finalized. Making changes out of spite or in a way that is meant to hurt your ex will only lead you to issues long-term, so it is recommended that you act with knowledge and patience.
Work closely with your lawyer to ensure that coverage is properly provided to all children throughout the divorce. With the right team on your side, you can help insurance and finances be handled as smoothly as possible.
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