Insurance Issues to Consider After Divorce

Beyond the heartbreak and turmoil synonymous with divorce, there are so many pragmatic issues to be concerned with. One of the most important often doesn’t come to mind until months after the papers have been filed. Insurance issues can arise during any life event, but divorce can drastically change your coverage. If you’re going through a divorce or have recently gotten divorced, it’s important to consider the ramifications to your insurance policies, or lack thereof.

Disability Insurance

It’s important to consider disability insurance, as the loss of a second income can make you even more vulnerable to insurmountable medical bills. You can purchase disability insurance through an employer or privately, but keep in mind that you must have an income to qualify for such coverage. Generally, disability insurance pays around 70 percent of your income, so if you’re paying alimony and become disabled, or you’re receiving alimony and become disabled, keep in mind that the alimony settlement may likely be reduced.

Health Insurance

Many married couples rely on one spouse’s employer health benefits for health insurance. You can keep your own health insurance policy after a divorce so long as you have your own coverage; you cannot remain a dependent on your spouse’s employer-provided health coverage after finalizing your divorce. There are a few routes you can take if this is the case for you. One, you can sign up for coverage through your own employer if they offer it; because divorce is a qualified life event, you’ll be allowed to sign up outside of the normal open enrollment period because you’ve lost coverage from your spouse. Two, you can buy a policy directly through a health insurance company or through your state’s health insurance marketplace, but this type of coverage can be extremely expensive. Finally, you can keep the coverage you had through your ex-spouse’s plan, but you must pay for it through COBRA. This law allows family members who have lost group health insurance buy coverage for up to 36 months following the loss of original coverage.

Life Insurance

As you review your assets, it’s important to list any and all life insurance policies and make sure you understand the beneficiaries listed on each policy. Say you listed your spouse on a life insurance policy, but don’t remove them; if you get married again one day and pass away, your ex will receive the money under that coverage plan. In some situations, divorce agreements require an individual to buy life insurance and name their ex-spouse as a beneficiary, so that if the former spouse dies the surviving ex-spouse can use the payout to supplement child support payments or replace lost alimony.

If you’re older and don’t have life insurance, it’s still important to look for coverage. While it’s not something we like to think about, funerals and burials can cost thousands of dollars, and it’s important to be covered in the event that the bills fall to your children or other loved ones. Buying burial insurance can be a smart move. This makes sure the funeral expenses are covered, but doesn’t come with the high premiums and excess coverage life insurance may provide.

Car Insurance

After dividing up your cars between you, you’ll then need to contact your car insurance company and let them know about your divorce. They’ll then be able to remove your ex-spouse from any policy under your name. Keep in mind that you may lose benefits and discounts you had before thanks to the divorce, like insuring multiple cars or getting discounts for being married. Keep in mind that if you have a teenage child who is driving your cars, they may need to be listed on both of your policies, and can make your insurance bill more costly.

Divorce is rife with confusion, and navigating the issues that arise after filing those papers and finalizing the divorce can be difficult. When it comes to insurance, keep the above mentioned facets in mind.

Melissa Frank

Purple Camel Media



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