Insurance issues related to divorce

Posted by Lauren S. CohenJun 02, 20160 Comments

Many things can impact how well-positioned a person is financially to deal with unexpected events in the future. One is what their and their family's overall insurance coverage situation is.

So, when insurance issues come up, addressing them appropriately can be very important. Given how big of changes a divorce brings about, one thing one might not find that surprising is that divorce can give rise to a plethora of insurance issues.

For one, a divorce can lead to an individual needing to obtain new insurance policies, such as a new health insurance policy, a new home insurance policy or a new renters insurance policy. Some examples of things that a divorce can bring about that can lead to a person needing to acquire a new insurance policy include a person losing coverage they previously had under their spouse's policy and a person moving from the marital home to a new home or an apartment.

The changes in one's life and family that come up through a divorce can also sometimes necessitate making changes to one's preexisting life insurance, auto insurance, home insurance or other insurance policies. Such policy changes could involve things like who/what the policy covers, whose name the policy is in and the policy's beneficiary designations.

Also, insurance issues can be a part of the negotiations and proceedings in the divorce itself. For example, sometimes, requirements regarding life insurance or disability insurance (like requirements regarding getting such coverage and requirements related to beneficiary designations) are included in a divorce settlement a splitting couple reaches. So, whether to include such requirements in a divorce settlement can sometimes be a significant issue in financial negotiations in a divorce.

Insurance-related issues are among the many issues that can come up in divorce proceedings/negotiations that could have impacts on a divorcing individual's long-term financial security. Another example of such an issue is property division. When dealing with issues in a divorce that could have long-lasting financial implications, a divorcing person may find having a skilled divorce attorney's guidance and advice to be quite helpful.

Source: Forbes, “5 Crucial Insurance Changes After Divorce,” Barbara Marquand, May 25, 2016