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A divorce brings significant changes,
and it takes time for individuals to reorganize their affairs. Insurance coverage will commonly change when
a divorce takes place, and potential issues and increased financial obligation should
be recognized and prepared for in advance.
In most cases, insurance coverage
for children will not be interrupted as they will be eligible to continue
coverage under either parent’s employer’s health insurance policy. The parent providing insurance coverage for
the children is not required to be the custodial parent. In any case, as part
of the divorce settlement, insurance coverage for the children should be
On the other hand, new divorcees typically
must seek new coverage once a divorce is finalized. Those who had insurance
provided by their spouse’s employer, and who do not have access to their own
employer’s insurance plan, must replace that coverage. Though generally a more expensive option, COBRA
is available to an employee’s ex-spouse for up to 36 months following a
divorce. For many individuals, private insurance is the preferred, more
After a divorce, beneficiaries of life
insurance policies should be reevaluated and appropriately changed. While most married couples with life
insurance list their spouse as the beneficiary, this may or may not be
appropriate after a divorce.
Divorcees may mutually agree that a
life insurance policy for one or both individuals is appropriate to replace
child support or maintenance payments, or to cover additional child care
expenses in the event of the death of their ex-spouse.
and Home Insurance
Securing individual insurance
policies for auto and residence should be a priority following a divorce. Being
without insurance even briefly can have serious consequences. Also, taking out new,
separate insurance policies provides protection from financial responsibility
should there be rate increases due to claims submitted by an ex-spouse.
New divorcees may want to consider
the benefits of purchasing disability insurance. In the event of illness or
injury that prevents an individual from working, disability insurance provides
wage replacement benefits. Without a spouse’s income to rely on in this
situation, a newly single person may welcome the peace of mind that disability
Divorce related insurance issues and
concerns should be discussed in detail with an attorney before a divorce is
final. An attorney will advise whether circumstances warrant including specific
agreements regarding insurance within the divorce documents and guide clients
toward appropriate insurance decisions.