When you are divorcing there are many decisions to be made, and a common one concerns insurance. There are two common insurance issues divorcing couples must address, health and life insurance. Let’s talk about each one:
Once your divorce is finalized, you can no longer be covered by your ex-spouse’s health insurance (unless you have a Judgment for Divorce from Bed and Board and the insurance company does not reject this type of Judgment). You may not be able to keep that insurance after divorce. If you do not work, or you do work, but your employer does not offer benefits, you can qualify for COBRA coverage. This typically lasts only up to 36 months and either you or your ex have to pay the premiums depending on your divorce settlement or judgment. If you cannot obtain health insurance through your employer, you could consider your options with New Jersey’s health insurance exchange/marketplace.
If you have children with your ex, your children can remain on the policy, unless you have worked out another arrangement that is better for all involved parties. How that policy should be paid needs to be discussed
This health insurance issue should not be taken lightly. Health insurers have strict rules for when and how they need to be notified of your divorce. Failing to do so might be seen as insurance fraud.
Existing life insurance should be part of a divorce settlement or judgment. A life insurance policy is typically used to secure alimony and/or child support payments, including college obligations, in case a parent dies unexpectedly. The duration of coverage could vary depending on the length of the term of those support obligations.
Depending on whether the life insurance policy is to secure alimony or child support, the beneficiary/beneficiaries would be the ex-spouse who is receiving alimony or the child(ren) who is receiving the benefit of the child support. Oftentimes, the other parent is named custodian, trustee or guardian of the life insurance policy naming the child(ren) beneficiary. If you have multiple children, you may want to specifically state what share of the policy proceeds each child will receive.
Modern life can be complex and divorce touches on every area of our lives. If you have any questions about a divorce and its practical impact on your life, give our office a call, so we can talk about your specific situation.
