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The relationship between insurance plans and divorce

When irreconcilable differences arise between couples during a marriage, the end of the marriage may be the only solution. But, ending a marriage may only be the beginning of other issues that arise or come to light after the divorce.

Michigan residents in the process of divorcing or considering divorce will find it interesting to know that issues pertaining to life, health, home and auto insurance may require significant consideration during the divorce process and action on part of one or both parties after the divorce is finalized. Failure to address insurance issues may leave one over, under or not insured at all.

With respect to health insurance, one may be tempted to leave an ex-spouse on their insurance but if the carrier finds out that the ex-spouse should not be covered, they will be dropped. If children were covered under one spouse's insurance, the couples should decide under whose insurance they should be insured post-marriage or set up a rotating schedule to ensure their coverage. Coverage can be expensive for the party who once enjoyed the benefit of being insured under their ex-spouse's plan.

Similarly with life insurance, it is important to change the beneficiary on the policy in a timely manner. However, if alimony payments are required, one may, pursuant to state law, be required to include life insurance coverage in the divorce settlement. Finally, with auto and home insurance, after the divorce is finalized the parties should get separate auto insurance. If property division results in one side losing half of what they own, home insurance policies should be reviewed to reduce payments or if both sides end up renting, then to get rid of the home insurance policy altogether and consider respective renter's insurance.

During a divorce parties deal with numerous issues ranging from child custody to property division. Thus, issues pertaining to insurance may not be the first thing on one's mind. However, it is important for a divorcing couple to consider these matters and make the necessary and timely changes to avoid problems with the various types of insurance in the future.

Source: Reuters, "How to untangle your insurance plans in divorce," Geoff Williams, Sept. 11, 2012

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5885 N. Wayne RD | The | Smith | Law Offices, P.C. | 734.729.4465

The Smith Law Offices, P.C.
5885 N. Wayne
Westland, MI 48185

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