Going through a divorce is never an easy process. On top of the emotional and financial turmoil, it can also lead to numerous changes in your insurance coverage.

Understanding these changes is crucial in ensuring that you and your loved ones remain protected. In this article, we’ll discuss the different types of insurance that may be affected by a divorce and what steps you can take to navigate this process.

Health Insurance

One of the most significant insurance changes after a divorce is in health insurance coverage. If you and your ex-spouse were covered under the same plan, you will need to find new coverage once the divorce is finalized.

However, there are some options available to ensure that you remain covered.

If you were covered under your spouse’s employer-sponsored health insurance plan, you are entitled to continue coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for up to 36 months after the divorce.

While this option may be more expensive than your previous coverage, it provides a seamless transition from your previous plan.

Another option is to purchase individual health insurance through the Healthcare Marketplace, which is a government-run marketplace where people can buy health insurance plans.

To be eligible, you must enroll during the open enrollment period, which usually runs from November to December each year. Some states have their healthcare marketplaces with different enrollment periods.

If you have children, they may still be covered under your ex-spouse’s health insurance plan even after the divorce. This is often the case when one parent has more stable employment or better insurance benefits.

However, it’s important to consult with a divorce attorney to ensure that this is included in the divorce settlement.

Life Insurance

Life insurance is another area that can be affected by divorce. If you and your ex-spouse had a joint life insurance policy, you may need to revise it to reflect your new circumstances.

Typically, beneficiaries are updated during the divorce proceedings or after the divorce is finalized. If your former spouse was the beneficiary, you may want to consider updating the policy to include it to other family members or a new spouse or beneficiaries that you want to designate under the law.

If you were the policyholder, you can generally change your beneficiaries at any time.

It’s important to update your policy with beneficiaries who will continue to support your loved ones after your pass away, that way they remain financially covered even if something happens to you.

Auto Insurance

If you and your former spouse shared a car insurance policy, you will need to purchase a new policy on your own.

The reason why joint car insurance policies do not remain after divorce is because an insurance company usually assesses the risk of both drivers when they provide a joint policy, based on their driving records—credit score, age, driving history, and other factors. Once a driver is removed from the policy, the amount of risk changes, which affect the premium payments that will be required.

By getting your own auto insurance policy, you can shop around for the best rates that are based solely on your driving history and personal information.

Disability Insurance

Finally, disability insurance coverage may also be affected by divorce. If you and your spouse had a long-term disability insurance policy, it may need to be updated or even cancelled as well, depending on the arrangement made during the divorce.

A split of disability insurance policies may also be used as part of the spousal and child support arrangement that could be covered under maintenance in some states. Be aware that disability insurance is intended to replace a portion of your income should you become disabled, so make sure you are properly protected especially if it’s mandated in the divorce proceedings or in an agreement.

In Conclusion

A divorce can lead to significant changes in your insurance coverage, but it also presents an opportunity to reassess your needs and ensure that you have the protection you need.

By considering the types of insurance affected by divorce and your options for coverage, you can make informed decisions that will safeguard your loved ones and finances.