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Why it's important not to overlook insurance during a divorce - II

In a previous post, our blog began discussing how those going through the divorce process often have a tough road ahead, as they not only have to contend with a wide range of understandably intense emotions, but also attempt to resolve critically important issues, including child custody, child support, spousal support and property division.

Furthermore, we also discussed how it's imperative for divorcing couples not to lose sight of seemingly smaller yet important issues during these turbulent times, as it can create very real headaches in the not-too-distant future. By way of example, we raised the ostensibly mundane issue of insurance. 

In today's post, we'll continue this discussion, exploring some additional insurance considerations for divorcing couples.

Health insurance

If a person already has their own coverage through their employer or such coverage is available, then this may not prove to be much of an issue. However, if they are entirely dependent on their soon-to-be former spouse's health insurance, this could be a problem, as a divorce will mean that they will eventually be removed from the plan.

The good news is that they will have two viable options, including 1) purchasing a health insurance policy directly from the state's health insurance exchange or a health insurer, or 2) electing COBRA insurance, which allows them to purchase coverage though their former spouse's employer for up to 36 months.

The bad news, however, is that either of these options can be expensive.

As such, experts indicate that spouses who find themselves in this situation should strongly consider making health insurance a priority during property division negotiations.

Disability insurance   

Much like life insurance, if a person is going to be relying heavily upon child support and/or spousal support payments, it might make sense for them to make the procurement of disability insurance by their former spouse a priority during negotiations. That's because disability insurance covers a portion of lost income in the event of a workplace illness or injury.

Indeed, experts indicate that even the spouse seeking to make this a condition of any divorce settlement should take steps to secure disability insurance through their own employer, as it is simply that important.

If you question the need for disability insurance, consider that statistics show that the odds of becoming disabled for three months or more are now actually greater than the odds of dying before retirement.

Homeowners' insurance/renters insurance  

In the wake of any divorce, it will be important for the spouse who receives the marital home to take steps to ensure that their homeowners' policy is listed in their name only.

Even more important, however, is for the spouse out of the home and renting an apartment, duplex or townhome to secure a renter's policy. While this may seem like a small issue given everything going on with a divorce, a renter's policy can grant peace of mind in knowing that belongings are protected and exposure to liability is minimized.

Here's hoping the forgoing conversation has proven helpful. Remember to consider speaking with an experienced legal professional as soon as possible if you have questions or concerns relating to the divorce process or any divorce-related issue.

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