Any major life change sends a ripple effect through your finances — especially a divorce. Insurance matters may seem trivial next to the emotional upheaval of ending a marriage. But minding the details now can prevent financial pain later.

Here’s a look at three insurance changes to address after a divorce.

1. Life insurance

Buying life insurance and naming an ex-spouse as beneficiary may be required under a divorce agreement. If a former spouse dies, the surviving ex-spouse can use the life insurance payout to replace alimony or child support payments.

Term life is an inexpensive way to provide the safety net. You choose the term, such as 5, 10, 20 or 30 years, and the amount of coverage you need when you get life insurance quotes. Once the term ends, the coverage ends.

If there are no ongoing financial obligations as part of a divorce agreement, then it may make sense to remove an ex-spouse as a beneficiary on an existing life insurance policy.

2. Disability insurance

Disability insurance pays a portion of your income if you can’t work because of an injury or illness. It’s often overlooked, yet financial experts rank it up there with life insurance as an important financial priority. The odds of becoming disabled for 90 days or more are greater than dying before retirement. Today’s 20-year-olds have a 1 in 8 chance of dying before reaching age 67 and a more than 1 in 4 chance of becoming disabled, according to the Social Security Administration.

Couples should plan for disability insurance before the divorce is final, the American Institute of CPAs says. It’s a good idea to have disability coverage of your own if you earn an income. If you’ll depend on alimony or child support payments, then you’ll want the divorce agreement to require your ex-spouse to have coverage.

3. Health insurance

You can keep your health insurance after divorce if you have your own coverage. But you can’t stay as a dependent on your spouse’s employer-sponsored health plan once the divorce is final. You have a few options:

· Sign up for coverage through your employer if it’s offered. You can sign up outside the regular open enrollment period if you’ve lost coverage from another source.

· Buy a policy directly from a health insurance company or your state’s health insurance marketplace.

· Keep the coverage through your ex-spouse’s health plan, but pay for it yourself. To do this, you elect COBRA insurance, named after the federal Consolidated Omnibus Budget Reconciliation Act. The law lets family members who lose group health insurance because of divorce and other life changes buy the coverage for up to 36 months. The law applies to health plans sponsored by state and local governments and private companies with 20 or more employees. Many states have similar laws that apply to businesses with fewer than 20 workers. To elect COBRA coverage, let your health insurance plan provider know about the divorce; you’ll receive instructions on how to continue coverage and the cost. Questions? Talk to the person in charge of benefits at your ex-spouse’s employer.

 

Cosmo Insurance Agency can help you during your time of need.  We work to ensure that all of our clients have quality and affordable coverage.

 

Cosmo Insurance Agency is an independent insurance agency serving surrounding communities in New Jersey. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating the latest in technology-based tools and laws on healthcare, employee benefits, life insurance and finance, we keep our clients up-to-date with the plans that encompass all of their needs, whether it is individual or group insurance. 

 

CONTACT COSMO

GET A HEALTH INSURANCE QUOTE NOW

LEARN MORE ABOUT HEALTH INSURANCE

Source: https://www.nerdwallet.com/blog/insurance/insurance-after-divorce/

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015


View Mobile Version
Facebook
Twitter
LinkedIn
Blog
Google+
© Copyright. All rights reserved.
Powered by Insurance Website Builder