Top 3 Quick Insurance Moves to Make Following a Divorce

10 Mar

Divorce takes not only a major emotional toll on a couple, but it also comes with a financial toll that you have to deal with before the ink is dry on the divorce papers. While separating your finances can be difficult, it is a necessity, and one aspect of a financial separation is dealing with insurance related issues. 

Here is a quick overview of some of the insurance issues that divorcing couples should address:

Change life insurance beneficiaries

Many couples have their spouse as the primary beneficiary on their life insurance policy. However, if you are divorcing, you may want to consider changing your beneficiary to prevent your ex-spouse from collecting the death benefit if you should pass away suddenly. 

This is typically a very simple change to make. In most cases you can make the change online by logging into your account, but some insurers may require you to contact the insurer directly to make the change or send in a written request. Choose a new beneficiary carefully and make sure they are aware of your last wishes when it comes to the proceeds of the policy. In many cases it is also possible to cancel the policy in the event you don’t need the coverage any longer. 

Review your home and auto insurance

If your current homeowners and auto insurance policies cover both you and your spouse, you will need to get a new policy that only covers you and the vehicle you are taking with you in the divorce. This is usually pretty simple, and it is also a convenient time to shop your coverage looking for a better premium. Don’t forget to reregister your vehicle in your name only in the event both of you were on the title. 

The same is true for homeowners insurance. If one of you is staying in your home, the person moving out will want to make sure their name is off of the policy. If you or your spouse is moving into an apartment, you should absolutely consider renters insurance and if the move is to a new house, you will need to put a new homeowners insurance in place. 

This is a great time to shop your coverage to make sure you are getting the best deal. Always make sure you are comparing apples to apples when it comes to coverage levels and deductibles. 

Be aware that you may see your premiums rise a bit as insurers tend to give discounts to married couples.

Do you need a new health insurance policy?

If you lose your health insurance during the divorce because it is linked to your spouse’s employer, you may need to find new coverage. While is normally only possible to sign up for a new health insurance policy via the exchange during the open enrollment period at the end of the year, divorce qualifies people for a special enrollment period. 

Shop around for coverage, check out the health insurance available via your employer while also shopping for coverage in the private market and the insurance exchange. When comparing coverage, don’t just look at the premium, also consider prescription coverage as well as the deductibles that come with the various policies. 

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