How to handle the insurance issues after divorce

Folks always ask about insurance issues when they are getting divorced. To keep it short and sweet, there are four quick points I want to make. The first, is, make sure to have a clause in the stipulation of settlement that the non-custodial parent will have life insurance with the child as beneficiary. If that spouse passes away before the child turns 21, you want to be protected as far as support goes.

The second point is as far as health insurance, neither spouse is entitled to be kept on the health insurance policy of the other after a divorce. The law allows you to apply for COBRA within a certain time frame after the judgment is signed. But after a divorce, usually you are on your own as far as insurance. Although, I have heard of cases where the more affluent spouse was ordered to pay health insurance for the less affluent spouse under certain extenuating circumstances.

The third point is that you do not need your spouse’s permission to have a life insurance policy on that spouse’s life. But what about after a divorce? Do you have to terminate the policy? That is a good question. I am not sure how that would work. If the policy was opened pre-divorce, it seems you should be able to keep the policy. But I have to check into that. (If you know the answer to this and you are reading this post, feel free to leave a constructive comment that we can post on this point.) That is, if the policy was executed during the marriage are you obligated to terminate the policy after a divorce? I don’t think so. But then again, I mean, you would stand to benefit from the death of your ex spouse. That seems kind of weird….it would encourage crimes. Like hiring hit men to do bad things. Don’t you think? 

Last, don’t forget to remove your spouse as beneficiary to any insurance policies you have taken on your own life when you get divorced.

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