In our last post, we began speaking about the importance of dealing with insurance issues in divorce, looking at specific forms of insurance and the types of considerations that should go into divorce negotiations. We’ve already spoken about life and health insurance. Now we’ll pick up on some other types of policies.
As far as home and car insurance, it is certainly critical to maintain these policies during and after the divorce. Divorcing spouses do well to notify their insurance companies as soon as possible if a car or home changes ownership. And it should be remembered that if a spouse decides to eliminate a policy during the divorce, the other spouse will be liable for damage to the property if their name is still listed.
Long-term care insurance are individual insurance policies, so divorce doesn’t have as much impact on them. These policies can enter into property settlement negotiations, though, as part of one party’s expenses. So it is good to keep them in mind.
Disability insurance policies are also individual policies, so the same considerations apply as with long-term care insurance. Divorcing spouses who do not have disability insurance should really think about purchasing a policy, because the lack of a second income can make it difficult to meet financial obligations if disability occurs. This should especially be taken into account by the custodial parent. And as with life insurance, the cost of disability insurance can be factored into property settlement negotiations.
Keeping these points in mind will help divorcing couples better handle their issues concerning insurance.
Source: Fox Business, “How to Uncouple Your Insurance in Divorce,” Michele Lerner, May 31, 2013.