Getting Divorced or Separated
Going through a divorce is a highly stressful event, and usually laden with emotion. We feel for you. Whether you and your ex-spouse are on speaking terms or not, it helps to have a clear fact sheet that guides you through the rough of settlements and paperwork and provides guidance by giving you a list of things to do. We are here to help when it comes to adjusting your insurance.
Take it step by step, and be gentle with yourself. But be sure to revise your protection plan to your changed needs and to ensure that you have important coverage when you need it.
Unfortunately, this is not always easy. Call your team at CB Health Insurance to help make your transition from joint insurance coverage to individual protection plans as smooth as possible. As you think about this transition, here are some important things for you to consider:
There is a whole new set of questions that comes with a divorce. Are you paying alimony? Are you receiving alimony? Do you purchase life insurance? Do you change your life insurance beneficiary?
All these – and more! – are part of a divorce settlement. Dealing with the finances in a divorce is not easy, and emotions often make things even foggier.
If you have life insurance in place, you might want to consider keeping it in place, with your ex-spouse as the beneficiary, even after the divorce. If you are paying alimony, your ex-spouse might rely on your payments for cost of living and child support. If you delete him or her as beneficiary, you might leave them, and your children, in serious financial turmoil in case of your death. If you have no financial obligations to your former spouse, you may want to continue your life insurance but name a new beneficiary.
Many divorce decrees with actually REQUIRE you purchase a life insurance to continue to fulfill your obligations, even after your death. If you are the one receiving child support, you will probably want your attorney to make sure this is including in the divorce. You may even want to be the owner and beneficiary of the policy, even if you are not paying the premiums. This ensures that you are well aware that the policy is still in force and not cancelled a month, a year, or years after the divorce.
You have the option to declare your children to be the beneficiaries of your life insurance, but be aware that minors under the age of 18 cannot directly receive life insurance benefits. In case of your death, the money would either be managed by a court-ordered trustee, or the insurance company would hold the benefit until the child turns 18. Our best advice to avoid these options would be to contact a family attorney who can establish a trust which can be named as the beneficiary. You can then indicate in the trust which friend or family member will be entrusted to handle the financial issues for your children, and who will serve as guardians. (These can be the same or different people.)
If you are the spouse who receives alimony, you might consider adding a clause to the divorce settlement that the life insurance beneficiary cannot be changed or allowed to lapse without your consent.
Another factor to consider: Keeping your current life insurance in place allows you to lock in your rates and insurability, regardless of possible future health issues. (This is also the reason why you should consider getting life insurance if you don’t already have it.)
You have all been part of your ex-spouse's family health insurance plan. Now you’re getting divorced. Are the kids still covered? Are YOU still covered?
When you are going through a divorce, you may need to find a new health insurance plan for yourself if you have been previously covered on your spouse’s group health insurance policy. In this case, you may want to check to see whether you qualify for COBRA, which allows divorcing spouses to continue their current health insurance plan for up to 36 months following the divorce, at their own expense.
NOTE: Cobra is the Federal Law that applies to group employer plans with 20 or more employees. If you work for a smaller employer group, then Illinois Continuation rules apply. You can get up to12 months under the IL Continuation law, also referred to as Mini-COBRA. For more information visit the state site at: Illinois Continuation (Mini-COBRA)
There are advantages and disadvantages to this solution: COBRA is relatively quick and hassle-free way to ensure continuous health insurance coverage for you and your children. On the flip side, it can be very costly! In addition, if you wait 36 months to get private insurance, you may develop a condition that limits your insurability and keeps you from obtaining your own health insurance plan once your coverage through COBRA ends. It might be better to set up your own health insurance as soon as possible, and most likely will be a much more affordable solution!
If you have children, compare your and your spouses’ plan, and enroll your children on the better plan. You will need to not only look at the benefits, but also look at the cost. Some Employers pay a portion of the premiums for dependents, while others pay nothing to add dependents - for many, this can be the deciding factor on who will cover the kids. You will also need to discuss who will be paying for this coverage. Even if you are covering the children on your employer plan (because the cost and/or benefits are better), your ex-spouse might need to reimburse you for some or all of this cost.
A divorce is not easy. Allow us to help you by letting us assist with your new insurance protection plan. We provide you with choices, solutions, and absolute confidentiality when it comes to setting up your new protection plan.
Seek Help from Experts
With so many variables to consider, the best way to make this transition as easy and pain-free as possible is to consult with an expert. Our agents at CB Health Insurance know all the questions to ask -- and all the right answers to give -- to help you make the right decisions.
"It's our POLICY to see that you get the best POLICY that suits your needs!" Even if that is to stay with your current insurance plan.