Divorce can bring many changes to your life – both emotionally and financially. Many clients come into my office and have questions about health and life insurance policies. They ask me, “what happens to health and life insurance in divorce?” Both tend to be fairly straightforward, and I will discuss the answer to this question on this page.
Health Insurance and Divorce
Health insurance is fairly easy to determine in divorce. This is because once you’re divorced, if you’re on your spouse’s health insurance, the health insurance will terminate. It terminates as to the person who’s plan it’s not. That person then has the option of getting a health insurance plan through their job or paying for COBRA. COBRA is a type of health insurance where you can pay the cost of the insurance. Or, you have to get your own plan through the exchange or a private plan. Health insurance policies in divorce are fairly easy to deal with because it’s so cut and dry.
Life Insurance and Divorce
When it comes to life insurance and divorce, there are similar protocols to follow. If the policy is a term life policy, you can only change beneficiaries. So, typically if you’re the recipient of child support or alimony, which would terminate upon the person’s death, you want to make sure you’re the beneficiary of that person’s life insurance in the event that they die prematurely. If that is the case you want to always have coverage if you can of the amount that’s left to be paid to you.
Sometimes you’ll find a party that can’t get insurance for whatever reason, for instance if they have poor health. So, other ways to provide for that is that your ex can put you as a beneficiary on their post-divorce assets. They can put you on their 401(k) as a beneficiary for whatever wasn’t split by the divorce. In this case, if they died prematurely you’d get that. There are creative ways to work around insurance.
If you need help determining health insurance or life insurance in your divorce, contacting an attorney can help. We have seen these situations before and we can assist you in whatever way you need. Contact our office for more information.