Separation and divorce hold many unknowns. For many families, insurance is one area of uncertainty. There are several strategies you can use to make sure you and your loved ones have the coverage you need. That's true even during this stressful time. It's a good idea to talk to your legal counsel, as insurance may form part of your separation agreement. Here are some tips to get you thinking about what's needed.
Tip #1: Update all insurance policies
The first thing is to review all your existing insurance policies, including your home, car, health, and life insurance. Keep your personal information up to date if you are changing your residence, particularly your address and phone number. Get to know your coverage, specifically who's covered and for what.
In the case of auto insurance, for example, you may need to update who's driving the car, how often, and for what purpose. If you drive one of the vehicles in your former household, you may have to review who are the registered owners of the vehicles. If the vehicles are registered to your former partner, the auto insurance must be in their name.
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Tip #2: Consider additional insurance
Many couples are covered under one spouse's medical insurance. In the event of separation, you may be removed from your spouse's extended health policy. In some cases, spouses agree to continue coverage for a limited period during the transition. If this is up in the air, consider buying a supplementary health policy that you can rely on. If you are changing residences, remember to buy tenant insurance or home insurance for your new place.
Tip #3: Review beneficiary information
You may want to update your life insurance policy so that your former spouse is no longer a beneficiary. If you have children, you may each have to obtain life insurance for the children's protection. That provides a safety net in the event something happens to you before they reach the age of majority. This is also an important time to review your will and estate, so your wishes are respected in the event of your passing.
Tip #4: Talk to your employer
Some of your insurance coverage may come through your workplace. Talk to your HR department about updating information for extended health, long-term disability, and similar programs. If you are not a member of a group plan through your job because you had coverage from your spouse previously, see if you can opt back in. In some cases, it is mandatory for you to accept your employer's health plan if you do not have coverage elsewhere.
Tip #5: Make sure your kids are covered
For most parents, taking care of children is the priority during a separation. As part of the negotiations, you may agree to keep any children covered under one extended health plan or another. If the child (or children) lives primarily with one parent, you may want to confirm that their belongings, such as expensive electronics and other high-ticket items, are covered under the relevant home insurance policy.
Stay up to speed on your insurance options
Divorce is a challenging experience for everyone. Making sure you have the best insurance coverage can offer a layer of security and peace of mind. Get to know what's available to you during this time of transition.
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