After 17 years of marriage, Ann and David have recently decided to end their union. One can imagine that this time is emotionally devastating for them, but for many couples in the midst of divorce, finances and a secure future are at the forefront of their thoughts as well. Losing a partner can equate to losing half of your assets and financial security, and beyond restructuring monthly bills, insurance policies must also be restructured. If you are going through a divorce, talk to your Trusted Choice® Independent Insurance Agent about the proper steps to making your insurance changes.
Emotions can be intense when going through an ordeal like divorce, but remember your legal responsibility. Never alter documents and paperwork to sway in your favor, as it could result in financial and legal penalties if you are caught. An independent agent can be of assistance in facilitating necessary changes to policies, and usually a change in policy will require both parties named on policies to give consent to those changes. If you and your spouse cannot agree on terms, joint policies may need to stay in place until the divorce is finalized and attorneys can advise your agent on how to proceed.
If you and your spouse have life insurance policies, part of your divorce settlement should involve coordinating the ownership and beneficiaries of the policies and any trusts that are involved. When children are involved, it is important to consider the financial obligations set in place to take care of your children should one of you pass away.
Divorcing couples should notify their agents when the ownership of assets changes. Even if your spouse owns or has use of a vehicle or residence, you could still find yourself liable. Note that you may lose spousal discounts and possibly other discounts which have been bundled. Try to review these changes with your agent before your divorce proceedings, as you may be able to incorporate those expenses in the final settlement.
Usually couples utilize health insurance under one spouse’s employee benefits. If you were under your spouse’s insurance policy, you should be able to obtain health insurance through your employer if you work. Under the COBRA act, you may be able to stay on your spouse’s health insurance for up to three years, if you pay the premium yourself. Again, consider your children and who will be responsible for their health insurance.
DISABILITY & LONG-TERM INSURANCE
Talk to your agent about disability and long-term care insurance. Single people should be concerned about disability and long-term care insurance can be harder to handle, especially because you must consider that you may not have someone to take care of you if something happens. This alone can increase the amount of the policy. With disability insurance, you must currently have income in order to qualify, and typically disability insurance will cover 60-70% of your income. Be sure to have your divorce settlement address what happens with alimony payments in the event of disability, if it applies.
Most long-term care insurance policies are individual policies and are not generally impacted by divorce; but be sure to check the policy. Again, remember that if you received a discount for being married, the premium may increase if you become divorced. Don’t forget to include the premium amount as an expense when your address the final settlement. Also, depending on your age, if you do not have long-term insurance, consider getting it. Being single now means you may not have someone to take care of you, and you will have to pay for long-term care expenses yourself.
Your Independent Insurance Agent can walk you through all of these steps. Divorce can be very hard, but Prime Insurance Agency is here to assist you in any way.