Divorce brings significant changes to your life – many of which can affect your insurance coverage. As you transition away from married life, it’s crucial to review your insurance policies. Failure to update your insurance policies can result in gaps in coverage and high unexpected expenses.
Adjusting life insurance policies
If you didn’t list your life insurance policy and its cash value as a marital asset during the divorce, it’s important to review your policy beneficiaries. You may want to remove your ex-spouse and designate your children as the primary beneficiaries instead.
Alternatively, consider establishing a trust fund for your children as your policy beneficiary. A life insurance trust may help you reduce estate taxes and provide more structure and financial peace of mind for your children.
Finding new health insurance coverage
Health insurance often becomes a pressing concern for divorced couples. This is especially true if one spouse relies on the other’s employer-sponsored plan. If you’re in this situation, you have several options:
- Obtaining coverage through your employer
- Purchasing an individual plan through the health insurance marketplace
- Qualifying for Medicaid or Medicare, if eligible
- Opting for COBRA coverage or temporary continuation of your ex-spouse’s plan
Note that you can only continue health coverage of your ex-spouse’s plan for up to 36 months after the divorce. Moreover, it’s only a stopgap option, providing you more time to secure a new policy without risking a lapse in protection.
Take control of your insurance needs with legal help
You’ll need to tackle your insurance needs head-on to help secure your financial interests after divorce. Health and life insurance policies are just the beginning. Remember to review other policies, like homeowners or renters insurance and auto insurance, as well.
An experienced legal professional can help you understand your insurance needs better. They can assist you in untangling insurance coverage with your spouse and advise you on adjusting your policies to reflect your new financial circumstances better.
