A Bowling Green State University report showed in 2021 the U.S. divorce rate was at its lowest in 40 years, 14.0 per 1,000 married women. Despite this, many people still must deal with this situation and its aftermath.
An overlooked issue in divorce is the need to reevaluate insurance coverage. Insurance considerations must address the changes as a result of the marriage ending.
Health insurance
Many married couples have joint health insurance plans through one spouse’s employer. After divorce, you may no longer be eligible for this coverage. It is essential to explore your options, which may include continuing coverage through the Consolidated Omnibus Budget Reconciliation Act, obtaining insurance through your own employer or seeking coverage through a government marketplace.
Life insurance
Life insurance is another important consideration, especially if you have children. If you were previously the beneficiary of your ex-spouse’s policy, it is wise to reassess your situation. You may want to secure a life insurance policy of your own to provide for your children’s financial well-being in case of your passing. Additionally, if you have joint policies, you will need to decide how to split these or if they need modification.
Auto insurance
Divorce can also affect your auto insurance rates. If you and your spouse shared a policy, you will need to establish separate policies. Depending on your circumstances, this may lead to rate changes. It is a good time to review your coverage and adjust it to suit your current needs and budget.
Homeowners’ or renters’ insurance
If you own a home together, you will need to determine how to handle homeowners’ insurance. This could involve selling the property, one party buying the other out or continuing to co-own it. If you are renting, you may need to update your renters’ insurance to reflect your new living situation.
Disability insurance
If you have disability insurance, consider whether it still suits your needs. You may need to adjust your policy to ensure you have adequate coverage in case of illness or injury. This is especially important if you are the primary breadwinner or if you have joint financial responsibilities with your ex-spouse.
Long-term care insurance
Long-term care insurance is a consideration for older divorcing couples. After divorce, you may no longer have the support of your ex-spouse in providing care in the event of a long-term illness. Evaluating your options helps ensure you are financially prepared for any future care needs.
Insurance considerations after divorce are an important aspect of your post-divorce financial planning. While the emotional aspect of divorce is undoubtedly challenging, making informed decisions about your insurance can provide peace of mind as you navigate this new chapter in your life.