Insurance And Divorce
If your former spouse is the main support for you and your children via alimony payments and insurance, what happens if he or she dies? There is no guarantee that life will continue for a spouse until all the children are grown, graduated from college, and are supporting their own families. The day you start divorce proceedings is the day you consider the future and what it may hold. Don’t wait until a tragedy occurs to decide to remedy it.
So many important decisions are made during a divorce. Who gets the house? Who gets the kids? Who gets the dog? Who gets the big screen television? During the decision making process, insurance is often forgotten. Emotional issues are in the forefront, and insurance gets overlooked most of the time. Life, health, and disability insurances are not on the minds of a young couple with two small children.
Why Insurance Is An Important Consideration In A Divorce Settlement
Life Insurance – One of the parties in a divorce is likely to be financially obligated to a series of provisions for the other party. These obligations can be in the form of alimony, child support, and mortgage or rent payments. In the event the responsible party meets an untimely death or is in a situation that prevents the payments from being made, does the divorce decree include insurance benefits for the support and education of the surviving children? All financial obligations need to be protected by insurance. Equally important is the obligation to make insurance payments on time so the policy or policies do not lapse. You must be listed as the policy beneficiary, and it is best if you are the actual owner of the policy. Be sure the policy amount is sufficient to cover the loss of payments that would be received if no death occurs, and be certain you make regular checks on the policy to be sure it remains in force. The person responsible for making the insurance payments, can inadvertently or purposely allow a policy to lapse. Including the amount of the monthly premium in the monthly child support or alimony payment is the only guarantee it will be paid. The beneficiary will make the payment to be sure the policy is not cancelled.
Health Insurance – When the divorcing partners have children, one of the parents will be financially responsible for health and dental insurance coverage for the children. Often the insurance is purchased through a policy at the place of employment. Consult with your attorney on the best way to be sure health insurance for all parties is kept in place.
Disability Insurance – There are three ways you can be receiving disability benefits. You can be receiving dependent’s benefits, which are based on your spouse’s earnings. You can be receiving disability benefits based on your own social security wage earning record, or from The Social Security Income (SSI) program. Your benefit amount can increase if you are receiving payments from SSI, because the payments are based on your need. If your spouse’s income is no longer available to you, SSI may increase your benefit. You must report your divorce so your disability benefit can be refigured.
No divorce is easy, but it can be a bit easier when you know the necessary financial security needed for you and your children is assured. Be sure to discuss your insurance concerns with your attorney and include provisions for insurance in all divorce negotiations.