Saying vows on your wedding day you intended to stay together forever. Unfortunately for some couples, that intention eventually falters. Whether due to increasing stressors, changing goals, infidelity, or differences of opinion, divorce happens. In fact, according to the Centers for Disease Control and Prevention’s National Vital Statistics System, the current U.S. divorce rate is around 40%.
This overall rate is actually down from 50% in the 1980s but is increasing again in some demographics. According to CDC data, the rate of divorce has grown dramatically among couples over the age of 50. One study of trends conducted by a university in Ohio found the divorce rate increased by 100% in that age group from 1990 to 2010.
Regardless of age, divorce is a messy process. You have to tell your loved ones, friends, and possibly your employer depending on your line of work. You have to choose who gets to keep the primary house, or if you’re going to sell it. You have to separate assets. If you have minor children, you have to develop a custody plan. Worst of all you have to do it all while dealing with difficult emotions and lawyers.
Is it any wonder that many couples forget to check their insurance policies during divorce negotiations? Yet doing so is essential to keep up proper coverages that reflect your changing financial circumstances. The following suggestions should help you touch all the bases should you find yourself in a divorce situation.
Life Insurance
Once divorce is the only option, immediately review the beneficiaries listed on your life insurance policies. Most couples list the other, and if you forget to make a change before passing away, your ex will get the benefit, even if you’ve remarried and had more children.
You may also need to contemplate an extra policy to cover alimony and/or child support in the event your ex passes away. Ownership of the policy should be in your name to prevent cancellation or a change of beneficiary. You may be able to include the cost of such insurance in your divorce settlement.
Health Insurance
Many couples share health insurance policies. If your coverage happens to be through your ex’s job, you’re going to have to secure a new policy on your own. Don’t wait too long to apply or you could find yourself without insurance until your new plan kicks in.
If your employer doesn’t offer health insurance coverage, or you’re currently unemployed, you may be able to continue coverage on your spouse’s employer’s plan under the Consolidated Omnibus Budget Reconciliation Act (COBRA). But this can be a costly option. After January 1st 2014, Obamacare will likely be the better choice.
Home and Car Insurance
If ownership of the home or automobiles is going to change as a result of the divorce proceedings, alert your insurance agent immediately. As you uncouple your coverage, you may lose previous multi-policy discounts. Singles sometimes pay higher rates than married couples do as well. Incorporate the new costs into your estimates before finalizing your divorce settlement.
Disability Insurance
If you don’t already have one, consider adding a disability policy. Accidents happen, and handling short or long-term disability can be much harder when you’re single and relying on one income. Buy a large enough policy to cover your lost wages, medical expenses in excess of those covered by health insurance, and long-term care if needed.
Insurance may seem like the last subject you need to worry about when you’re in the midst of a divorce, and you may be tempted to postpone dealing with it.
However, consulting your insurance professional about the implications of your separation and making necessary changes right away will allow you to put an unpleasant situation behind you sooner rather than later.
Resource:
If you ever find yourself in the middle of a divorce, this highly recommended resource filled with divorce advice may be of significant help to you:
The Complete Guide for Men and Women Divorcing seeks to address important legal aspects regarding divorce while also covering the emotional issues that are bound to crop up. The goal of the book is to be a one-stop guide that helps readers who are contemplating or in the middle of a divorce.
Available at Amazon.com
