Kajko, Weisman & Colasanti, LLP

Settling insurance issues is a part of modern divorce

A recent article briefly highlights a Boston divorcee's plight as she dealt with her insurance plans after ending her marriage. Complications can arise when a divorcing couple neglects to make the necessary changes to their insurance policies including health, car, life and even home owner's insurance.

With all of the life changes and emotional turmoil that can accompany a divorce, it's easy to see how changing insurance policies isn't the most pressing concern. But it's certainly something that deserves careful thought when preparing for a divorce.

The most pressing, and probably most obvious issue is health insurance. A divorced person cannot remain on an ex's plan, but he or she will be eligible for temporary COBRA benefits. If the couple has children, then decisions about whose plan to include them on need to be made, which may affect spousal and child support.

A longer term issue many people might overlook is life insurance, as many policyholders list a spouse as a beneficiary. After a divorce, life insurance beneficiaries aren't updated as a matter of law. So unless individuals want their spouse to remain the beneficiary they need to update the insurance policy themselves. Life insurance policies may also be subject to property division as marital property. It's best to consult state laws for more information.

Finally there is car and house insurance, which will probably need to be adjusted by the change of circumstances.

Like most things in a divorce, it's better to be prepared for any possible contingency. Once the dust settles, not having to worry about insurance issues could be a very comforting feeling.

Source: Reuters "How to untangle your insurance plans in divorce," Geoff Williams, Sept. 11, 2012

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