Comprehensive Financial Solutions, Inc.

440-343-4223

Insurance Read Time: 3 min

What You Should Do About Insurance Following a Divorce

Divorce can be an emotionally and financially challenging life event. In the face of the many possible adjustments divorce entails, making changes to insurance coverage may be overlooked.

Here's a look at each type of coverage:

Auto

If there is a change in auto ownership, you may need to obtain car insurance coverage to coincide with that change. You also may want to think about removing your former spouse from a policy to protect yourself against potential liability and ensure that his or her name does not appear on any claim check. Don't forget to notify the insurance company of any address change.

Home

A divorce may mean a new place of residence for one or both spouses. Consider purchasing renter's insurance if you are moving into a new apartment. If you are staying in your present home, you may want to remove your ex-spouse's name from the policy and consider changes to any property coverage if, for instance, your former spouse is taking jewelry or other items of value from the premises.

Life

Life insurance is often purchased to cover financial obligations that may occur when a spouse passes away. Life insurance policies may be an element of your divorce agreement. If possible, consider buying a policy on a former spouse's life if he or she is providing alimony or child support.1

If you do retain a pre-existing policy, be sure to review and amend the beneficiary so that it reflects your current wishes.

Disability

A disability may have an adverse impact on the ability of a former spouse to pay alimony or child support. As such, you may want to include the maintenance of such a policy in the divorce agreement.2

Health

If you or your children are covered under your former spouse's employer group plan, you may want to contact the employer to continue coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act). If you have an individual policy, you may want to consider adding your children to the policy. You may not want to duplicate coverage for your children.

1. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
2. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Federal and state laws and regulations are subject to change, which may have an impact on after-tax investment returns. Please consult legal or tax professionals for specific information regarding your individual situation

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

The Importance of Business Valuation

The Importance of Business Valuation

You know your company inside and out. But do you know how much it’s actually worth on the open market?

Millennial Money Myths: Buying a Car is Better Than Leasing

Millennial Money Myths: Buying a Car is Better Than Leasing

During difficult economic times, it is even more critical to be smart about where you spend your money. And it is essential to do your homework so...

Behavioral Finance

Behavioral Finance

An amusing and whimsical look at behavioral finance best practices for investors.

 

Have A Question About This Topic?







Thank you! Oops!

Countdown to College

Preparing for college means setting goals, staying focused, and tackling a few key milestones along the way.

The A, B, C, & D of Medicare

Learn about all the parts of Medicare with this informative and enjoyable article.

A Cheat Sheet for Sending Your Kid to College

Dropping off your son or daughter is loaded with emotions; here are a few tips for a smoother experience.

View all articles

What Is My Life Expectancy?

Estimate how many years you may need retirement assets or how long to provide income to a surviving spouse or children.

Impact of Taxes and Inflation

Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.

How Compound Interest Works

Use this calculator to better see the potential impact of compound interest on an asset.

View all calculators

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

View all presentations

What to Do When You Lose Your Wallet

Ever lost your wallet? Frustrating. Here’s what you can do to keep yourself safe.

Investments

You’ve made investments your whole life. Work with us to help make the most of them.

Charitable Giving: Smart from the Heart

Do you have causes that you want to support with donations?

View all videos