Insurance Policies and Divorce: What to Change and Why

 Posted on May 30, 2024 in Divorce

Divorce brings about a whirlwind of change, and practical matters like insurance can get easily overshadowed amidst the heartache. In Illinois, understanding how divorce impacts your insurance policies – be it health, life, or property insurance – is crucial for your financial and personal stability. By hiring a divorce attorney and re-evaluating or adjusting your insurance coverage, you can better protect yourself and your loved ones from unforeseen circumstances.

Understanding Health Insurance Coverage Post-Divorce

One of the most immediate concerns during a divorce is health insurance. If you are currently covered under your spouse’s plan, you will need to seek alternative coverage post-divorce. Illinois law allows you to remain on your spouse’s plan until the divorce is finalized, but once the paperwork is signed, you need a new plan. Research your options thoroughly, whether that is through your employer, the marketplace, or COBRA.

What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) can temporarily relieve those who suddenly find themselves without health insurance after their divorce. COBRA allows you to continue your current health insurance for up to 36 months post-divorce, albeit usually at a higher cost. This grace period gives you the security to explore more permanent solutions.

Understanding Life Insurance Post-Divorce

Life insurance policies often list a spouse as the beneficiary. Post-divorce, it is important to revisit these beneficiaries. If you forget to make this change and something happens to you, the proceedings may go to your ex-spouse instead of your children or a new partner. Ensure that your life insurance policy reflects your current wishes.

Evaluating Policy Needs

Divorce changes your financial responsibilities. You might have child support obligations or new debts. Re-evaluating your life insurance policy ensures that it aligns with your new financial landscape. You may need more or less coverage than before, so consulting with an insurance advisor can be beneficial.

Understanding Property Insurance Post-Divorce

If you are keeping the marital home, make sure to transfer the homeowner’s insurance to your name alone. Securing renters insurance or a new homeowner’s policy is also important if you are moving to a new place. This protects your belongings and is often required by landlords and mortgage companies.

Adjusting Auto Insurance Post-Divorce

Auto insurance requires a similar rethink. If both parties share a single policy, it will also need to be split. Each person needs his or her own auto insurance moving forward. Updating your policy ensures appropriate coverage, given any changes in vehicle ownership or driving habits.

Contact a DuPage County, IL Divorce Attorney

While a lot is going on during a divorce, attending to these important insurance adjustments early can save considerable hassle and financial strain down the road. Proactively managing your health, life, and property insurance policies ensures you enter the next chapter of your life as securely as possible. Contact the Wheaton, IL divorce lawyers with The Stogsdill Law Firm, P.C. for legal assistance. Call 630-462-9500 for a private consultation.