Your finances are going to see some significant changes after going through a divorce. One of the things that many people don’t initially think about are the changes in your insurance policies. This may seem like a rather small subject in comparison to the other things that your divorce is going to impact, it’s still important for you to find out exactly how your insurance policies are going to change following your divorce.
Once you have divided up your cars following the divorce, you will need separate insurance policies. You should let your car insurer know about the divorce, and then remove your ex-spouse as a driver on the policy. Make sure that you have a new policy that is under your own name.
Disability insurance will pay for a percentage of your income in the event that you cannot work due to illness or injury. It’s very overlooked, and yet some financial experts regard it as being just as essential to have as health insurance or life insurance. Today, twenty year olds have a one in four chance of becoming disabled before they reach the age of sixty seven. Since you’re no longer bringing in a second income from your ex-spouse, buying a disability insurance plan will be even more critical.
If you have your own health insurance coverage, then you should be able to keep your plan after a divorce. If you are listed as a dependent on your spouse’s health coverage, you will no longer be able to keep this health plan once your divorce is finalized. You have a number of different options that you can pursue in this type of situation. This includes signing up for coverage through your employer (if it is offered), buying a plan through your state’s health insurance marketplace or health insurance company, or going with COBRA insurance, which will allow you to keep coverage through the health plan of your ex-spouse. Whatever you choose, just make sure that you have some sort of health coverage once the divorce is finalized.
Regardless of whether you are moving out of the house or your ex-spouse is, you will need to let the home insurance company know about the separation. Once the divorce is final, the policy will need to be in the name of the homeowner. If you move into a new home or apartment, you will need to search for your own home insurance or renters insurance. Renters insurance will cover your belongings and should include liability insurance, which will pay for injuries or damages that you cause to others.
It may be required under a divorce agreement for you to buy life insurance and name your ex-spouse as a beneficiary. In the event that your ex-spouse passes away, you can then use the life insurance to replace child support payments and alimony. If there are no ongoing financial obligations following the divorce, however, then naming your ex-spouse as a beneficiary is probably not necessary.
Again, insurance is not the first thing people think about when going through their divorce but it is something that will change. Be prepared by knowing what you should do with your policies to make sure you are still covered when your divorce is finalized.
P.S. If you need additional help preparing for your divorce, we have created a FREE Divorce Financial Documents Checklist. Grab your copy by clicking the picture below.