The process of dissolving a marriage takes time and effort, and many Louisiana spouses are surprised at the sheer volume of decisions that must be made and issues that must be addressed. Dealing with insurance policies is an excellent example of a seemingly small task that can have significant negative consequences if not handled promptly and properly. The following tips are offered in the hope of reminding spouses of the importance of adjusting insurance policies during and after one’s divorce.
Life insurance is perhaps the most important item to address. It is easy to grow weary of the seemingly endless list of to-do items that follow a divorce, but this is one task that should not be put off. For many people, the value of their life insurance policies exceeds that of any other single asset. Forgetting to change one’s beneficiary designation could result in one’s former spouse receiving this benefit in the event he or she outlives the policyholder.
Health insurance is another issue that many divorcing spouses face. When an individual is covered through the group policy offered by their spouse’s employer, that coverage will end upon the finalization of the divorce. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows a recently divorced person to remain on their spouse’s policy for a period of 36 months. However, the insured party must pay the entire premium amount, making this a prohibitively expensive option for most. It is important to secure solid and affordable healthcare coverage as soon as possible after the divorce, to avoid serious debt issues in an injury or illness takes place while uninsured.
Many Louisiana spouses feel overwhelmed by the many responsibilities that follow the end of their marriage. However, to delay taking action on insurance matters can have serious ramifications in the event that coverage is needed. Those who are considering filing for divorce, or who are already engaged in the process should make insurance matters a top priority.
Source: Fox Business, “How to Uncouple Your Insurance in Divorce,” Michele Lerner, May 31, 2013