Divorce is a confusing, complex and draining process for both partners. It can affect the partners, children, family members, friends, and others. Among these, it also has a significant impact on the financial aspect of the person. There is proper division of financial resources, debts, and liabilities among the partners. However, there is equal division; people are in doubt about what will happen to their insurance.
So, in this article, we will study the impact of divorce on the insurance coverage of the partners. You can learn how about the severe impacts in this article. So, stay tuned with us and learn about the relationship between divorce and insurance coverage.
What is the Impact of Divorce on Insurance Coverage?
Divorces pose unique challenges to the couple, and they can affect coverage. There is a possibility that these cases are handled either by the partners themselves or by the company or the family courts. Divorce has various impacts on various types of insurance coverage. So, let’s understand how it will change your coverage agreements.
- Health Insurance: It is one of the most ignored concepts in divorce how the couple will manage their coverage, especially health insurance. In health insurance, if there is a working and a non-working spouse, then the working spouse will pay the premium amount, and the non-working will also get the benefit. But if there is a divorce, the non-working spouse will not get benefits from the insurance. If the non-working spouse has to get the benefit, then they have to get help from COBRA (Consolidated Omnibus Budget Reconciliation). With this, if they qualify for the benefits, they can receive benefits from the insurance company, but they have to pay half of the premium amount.
- Children’s Health Insurance: In divorce cases, children do not lose their health insurance even if their parents get separated. They can receive either from both, or the partners have to decide it. Child health insurance comes under child support, and therefore, the parents have to decide how they will pay for the insurance.
- Life Insurance: In life insurance, both partners have to decide between either continuing the coverage or other options. If there is cash value life insurance, the partners can withdraw their insurance amount and divide it equally among them. But if there is no consensus between the two, then the final decision will be of the family court judge.
So, these are specific impacts of divorce cases on the insurance coverage of the partners. It is essential to decide on insurance with the help of your attorney so that you can explore various options and choose the best for you.
