Divorce brings changes big and small to your life, so many that you may forget to account for some. For instance, how does dissolving your marriage affect your insurance policies?
NerdWallet explores essential insurance changes newly divorced spouses should make. Have a plan to maintain your policies and the protection they provide.
If an injury or illness leaves you unable to earn a living, disability insurance picks up some of the financial slack. Newly divorced spouses with a stable income should secure their own disability coverage. Those who rely on child support or alimony payments after divorce may want to use the divorce agreement to ensure an ex-spouse has disability insurance, in case she or he sustains a disabling injury.
Some divorce agreements require former spouses to secure a life insurance policy and name their ex-spouse as the beneficiary. That way, if one spouse dies, the other may use the death benefit to replace alimony and child support payments. For couples who do not need alimony or child support, it could make sense for them to remove each other as beneficiaries on their life coverage policies.
Spouses who have their own health insurance plans keep their coverage after divorce. Some states and coverage providers do not allow individuals to remain on an ex-partner’s employer-sponsored insurance plan. If not, the uncovered spouse may see if her or his employer offers health insurance and sign up for it, secure a policy from the health insurance marketplace or pay for coverage offered from an ex-partner’s plan.
Not knowing every facet of divorce could cost you much-needed insurance coverage. By understanding which policies to adjust, you protect your future self and peace of mind.