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Handling insurance policies in the event of a divorce

Couples who are in the midst of a divorce in New York find themselves facing a variety of issues that require their immediate attention. Among them is determining how to handle their insurance policies. While the courts are in charge of dividing marital assets, issues regarding insurance policies are best-taken care of by the former spouses themselves.

According to Insurance Quotes, divorcing spouses should approach the situation early on to prevent potential complications and time delays. It is a good idea for separating couples to find out from their insurers in writing what will happen to their spouses’ coverage when they legally separate. Some insurance companies consider divorce a valid enough reason to remove an ex-spouse from the insurance.

When it comes to health insurance, children are allowed to stay on the health insurance policy and cannot be removed because of their parents’ marital status change. However, if both spouses have policies through their employers, they may want to discuss which policy is best for the children and switch them over to it. If only one spouse has insurance from their employer, then as the policy holder they are the only parent who is allowed to remain on the policy. However, the uncovered ex-spouse does have the option of obtaining COBRA (Consolidated Omnibus Budget Reconciliation Act). Ex-spouses who are considering COBRA should be aware that the law limits the amount of time they have to do so and plan accordingly.

To ensure that their family is properly taken care of financially in the event of their death, some separating couples may need to take out new life insurance policies, states Bankrate. In addition to negotiating ownership of their policies during the divorce proceedings, ex-spouses should also remember to double check the beneficiaries they have listed on their policies to ensure their new partner instead of their former one does not get the money.

Couples who the take time to evaluate and handle their insurance policies before their divorce is final can avoid complications to better protect their post-divorce financial situation.

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