Divorce Triggers Different Insurance Issues
One topic that is often overlooked or taken for granted in divorce negotiations is insurance. People just don’t think about it until they need it. As you separate, here are five different types of insurance that you need to be thinking about:
A divorce can seriously complicate your health insurance coverage. Most families have an employer-sponsored plan that provides benefits for the entire family. Following a divorce, however, the spouse with the employer-provided health insurance plan may no longer be able to provide coverage for the former spouse. A divorce will cause the dependent spouse to lose his or her healthcare coverage.
How judges rule on health insurance
If the court determines that the obligor has insurance or coverage available, the judge will normally include in the support order a requirement that the obligor does one of the following: exercise the option of additional coverage in favor of the spouse, obtain coverage for the spouse, or reimburse the spouse for the cost of health insurance.
As it relates to health insurance for children, the law in Texas is clear: “When the court makes an order for maintenance or support of a child, said court shall determine whether the obligor under such order has health insurance or other health coverage on a group plan available to him or her through an employer or organization or has health insurance or other health coverage available to him or her at a reasonable cost that may be extended to cover the child for whom support is ordered. When said court has determined that the obligor has such insurance or coverage available to him or her, said court shall include in the support order a requirement that the obligor exercises the option of additional coverage in favor of the child or obtain coverage for the child.”
Life insurance should be court-ordered as part of a divorce. What most people don’t realize is that the court views life insurance more as child support or alimony insurance — it’s deemed to be security on one’s obligation to pay said support (which terminates upon the obligor’s death). Courts will frequently order a parent to maintain a life insurance policy naming the other parent as the beneficiary on behalf of the children (you wouldn’t want to name children as beneficiaries because most would use the money to buy candy or a new car!).
The amount of life insurance is determined with an eye toward the amount of the death benefit. In establishing the amount of the death benefit, one must keep in mind that child support is subject to change and a death benefit that appears excessive at the time the divorce was negotiated may not seem excessive in the future if viewed in the context of a future child support order. Moreover, one has to look at the level of inflation which, though low for the past ten years, has in recent memory been quite high.
If you see the value in ensuring the items in your home are against damage or theft, make sure that you’ve got a homeowners insurance policy in place.
Most people don’t think about becoming disabled however statistics show that if you are under age 65 you are twice as likely to become disabled as you are to die. Disability insurance pays the insured a monthly benefit in the event that the insured person is disabled and unable to work. This type of insurance is extremely important if alimony or child support payments are ordered, especially if the obligor has no other source of income to make these payments.
Auto insurance covers damage to your car and damage that it may cause to other people’s property. Auto insurance is regulated by the Commonwealth of Massachusetts. When you separate from your spouse, inform your insurance agent. Additionally, your separation agreement should clearly state who is responsible for paying the auto insurance premiums for both the children and the other spouse.
Get your Texas uncontested divorce started for free
Throughout Texas, the key to an uncontested divorce is a quick, easy and painless divorce — without conflict. In an uncontested divorce, we will either represent you or your spouse, but not both. We cannot advise the party who is not being represented. In cases where the other party is self-represented, we can meet with both parties and review all of the insurance and other information you need to know; however, it will be made clear that the attorney cannot give advice to the spouse who is not being represented by our team.
One thing is for certain — an uncontested divorce is by far the easiest and least expensive way to end your marriage with dignity. Rather than participating in a nasty courtroom battle, consider the “No-Bickering” Divorce where ashes are not the only thing left behind.