Many Arizona residents may not realize the ramifications of a divorce on an individual’s insurance policies. During the process of obtaining a divorce settlement, one’s insurance policies must be closely examined to achieve an equitable distribution of the parties’ assets.
With respect to health insurance, failing to make the proper changes, such as dropping one’s ex-spouse from a policy, risks a determination of insurance fraud by the provider. If this happens, the insurance company may drop that individual. It is also important to try to determine prior to the divorce, what the out-of-pocket expense of obtaining a new health insurance policy will be should this be necessary. The cost of health insurance can be quite significant and should never be overlooked in the divorce process.
When it comes to life insurance, once again the policy must be closely examined prior to a divorce being finalized. Frequently, in a high income marriage, a spouse may be required to maintain life insurance to cover missing alimony or child support payments. For car insurance, if the two cars an individual may have previously had on one plan are now at two different residences, separate plans need to be obtained. Finally, if may even be possible to reduce the amount of your homeowners insurance payments after one spouse has left a marital property. Assuming that at least one half of the contents of the marital home were taken away, it should be relatively easy to obtain a reduction in one’s home-owners insurance.
All of these insurance policies must be closely examined prior to reaching a divorce settlement in order to make sure that no one is left without the important insurance coverage they need following a divorce.
Source: Reuters, “How to untangle your insurance plans in divorce,” Geoff Williams, Sep. 11, 2012