During the often stressful time of divorce, some things fall through the cracks. One of those items dealing with different types of insurance including health, life, homeowner's and car insurance. These issues, however, are important to deal with and can cause many headaches if not dealt with during the divorce.
Life insurance can be covered in the divorce settlement. For example, the divorce settlement can require each spouse to put their children as the beneficiaries of their life insurance plans.
A big thing to remember is to take the former spouse off of any life insurance policies as beneficiary. Some may think that if they change their wills, that will control the disposition of their property if something happens. Life insurance, however, is a contract, and that will control so the beneficiary must be changed.
In addition, sometimes life insurance policies are only owned by one spouse and the other spouse is covered under a rider to the policy. The spouse who owns the policy controls the policy provisions, even on the rider. The spouse who is named on the rider must be released from the policy in order to change beneficiaries.
Divorcing spouses will have to get separate auto insurance plans. Sometimes, spouses can get auto policy payments in the divorce settlement.
If both spouses remain on the mortgage then both spouses must remain on the homeowner's insurance policy. If only one spouse is living in the house and the other spouse is still listed on the mortgage, make sure that mortgage and insurance payments are listed in the settlement.
If one party has remained in the house, but the other spouse took half of the household items, there is a possibility for reduced homeowner's insurance. Renters insurance should also be looked into for spouses who move out of the home and have to rent another home.
After a divorce, some spouses who want to remain on their exes employer provided insurance may be able to do that under COBRA which provides temporary coverage for specified workers and their spouses. The spouse will still have to pay the entire monthly premium and an additional fee. This only lasts for about 36 months under the federal law.
If there are children, spouses will have to decide whose plan the children will be on, and how the premiums will be paid for.
Dealing with all the different types of insurance is difficult and will bring on new and unanticipated expenses. Some of these can be dealt with in the divorce settlement but it is often unavoidable that expenses will increase.