Insurance protects you and your spouse financially in various aspects of your life. As a married couple, you and your spouse may have been on a health insurance policy together through one of your employers. You most likely named each other as beneficiaries on your life insurance policies too. If you own a home together, you probably have property insurance to cover potential damage to your home and personal belongings. And, you may have paid less in car insurance with married couple rates and multiple cars.
But now that your marriage is ending, what does that mean for your insurance policies and coverage? One thing it does not mean is that you can immediately kick your spouse off policies. You must wait until the divorce is final to remove your spouse from a policy, and you may not be able to remove them at all if your marital settlement agreement or the court says otherwise.
Like so many parts of life when you divorce, your insurance policies will be affected, and changes and updates may need to be made. A New Jersey divorce attorney can advise you about how insurance will work after your marriage ends and your rights and responsibilities based on the facts of your individual case.
HOW HEALTH INSURANCE AFTER DIVORCE WORKS
If your spouse is on your employer-sponsored health insurance plan, she will almost certainly need to find a new plan once you are divorced. Most employers do not allow former spouses to maintain health insurance coverage on their employee’s policies but there is usually a grace period of 30 days after divorce for your spouse (or vice versa) to obtain an independent or new policy.
Either way you will need to notify your employer of the divorce and the sooner you do this, the more time everyone has to plan and get any requisite paperwork finalized. Your insurance plan documentation should provide instructions about timing and other requirements for notifying your employer.
You could also potentially be required to pay for your former spouse’s new health insurance coverage if that is a factor in your divorce decree.
What If You Have Children?
If you have dependent children on your health insurance policy, they may remain on your policy following divorce and the cost of covering the children’s share of the premium would be factored into each parent’s obligation as set forth in the New Jersey Child Support Guidelines..
There is the possibility that you and your spouse may come to another agreement regarding children’s health insurance coverage, if that makes more sense for the situation, such as children going on her policy, or just finding an independent policy. It’s important to think about the cost of coverage relative to the benefits of the plan no matter which carrier covers them. And, either way, the cost of the coverage will always be proportioned out between both parents in the child support calculation.
The New Jersey court will not permit the children to be without coverage, whether through a private carrier or, if one or more of the parents qualify, through the state-mandated insurance policy. So, this is not a topic that should require high conflict in agreeing to as it is a very practical approach to determining how to handle it.
WHAT HAPPENS TO LIFE INSURANCE IN DIVORCE
Life insurance may or may not be considered a marital asset in the equitable distribution of property in divorce. Whether it is or isn’t depends on the specific type of policy and other circumstances. For instance, term life insurance may not be divisible, but may be considered as part of your overall net worth. On the other hand, cash surrender values of life insurance products are subject to equitable distribution.
Even if it is not considered a marital asset, your life insurance policy may still be a factor in your divorce. As part of your settlement agreement you may be required to maintain the policy for the benefit of your ex-spouse or children if you are paying alimony or child support or college contribution for minor children or college-age kids. Again, as with so many issues of divorce, it depends on your unique marriage, divorce, and family situation. No two situations are exactly the same.
If your life insurance policy is not part of the final divorce judgment and your spouse was a beneficiary, finalization of your divorce will automatically revoke your former spouse as a life insurance beneficiary since she is no longer your spouse by definition and barring a legal instrument saying otherwise. But you will still want to update your policy right away with new beneficiaries to ensure your interests and those of your children or other people you wish to receive benefits upon your death are protected so there is no time gap between the divorce and any unfortunate early demise.
HOW DOES CAR INSURANCE AFTER DIVORCE WORK
Following divorce, the ex-spouse who moves to another residence will typically need to get an auto insurance policy with their new address and the vehicle they are driving. The spouse remaining at the address on the current policy can keep that policy with updates to remove the ex-spouse and any vehicles they take with them. If you had the benefit of a lower-cost married couples insurance rate, that will change as well.
If children are on the existing policy, determinations must be made as to whose address is their main home and so whose policy they will be on. This will likely be the address of the custodial parent. Like other insurance areas, helping your spouse pay for car insurance following divorce may or may not have been negotiated into your settlement or ordered by the court so that the parents each contribute a fair allocated share of these costs, depending on all the factors in your case.
WHAT HAPPENS TO HOMEOWNERS INSURANCE AFTER DIVORCE
When you own a home together, you are both listed on the property insurance policy, which not only covers damage to the home but also to your personal belongings. You will need to update the current policy if you are keeping the home, to reflect your new living situation. The spouse who is moving to another residence will need to get a homeowners or renters policy for their new situation.
GET HELP FROM A KNOWLEDGEABLE NEW JERSEY DIVORCE ATTORNEY
What will happen to your health insurance, life insurance, and other insurance coverage is a conversation you and your spouse should be having as you consider all the issues of divorce. Insurance coverage may be a factor in marital settlement agreements and alimony and child support orders.
An experienced attorney from [MFR] Men’s & Fathers’ Rights Divorce Lawyers in New Jersey can help you in negotiating insurance coverage issues and assist you with all aspects of ending your marriage. Our law firm focuses exclusively on resolving complex family law matters.
Call us today at (201) 880-9770 to arrange a confidential consultation.
