by Mike Smith
If you are finding yourself going through a divorce, there are several things to consider.
Life Insurance
If you are the parent of minor children, the judge may require, as part of the divorce decree, life insurance on each parent until the youngest child attains a certain age. This insurance protects child support payments that may cease if the payor dies prematurely. Often, group term coverage through work is not large enough and terminates should one leave that job. We recommend you try to determine what the judge might require and shop the open market for quality coverage prior to the issuance of the final divorce decree. Term insurance is usually acceptable.
Disability Insurance
Sometimes forgotten but perhaps more important, disability insurance provides income should one not be able to work due to illness or injury. If one spouse must make child support or maintenance payments, how would these continue if the payor can’t work? Disability insurance may replace missing income and offers a better chance child support or maintenance payments will not be interrupted. Group coverage through work often falls a bit short, so consider supplementing this coverage with an individual disability income policy. There is also a specialized product called Divorce Disability Insurance which is best suited for high-net-worth couples divorcing.
Long-Term Care Insurance
Generally, spouses are each other’s long-term care plan. But who will take care of the divorced spouse? Long-term care insurance can help pay for help at home, assisted living, or nursing care. For an older, divorcing couple (50+ years of age), investigate long-term care insurance BEFORE the divorce is final. While still married, secure a spousal discount that can save 30-50% off premiums. Upon finalization of the divorce, split the policy into separate policies but keep the discounts.
Auto and Homeowners
Remember to tell your auto and homeowners agent you are divorcing so coverages can be adjusted for ownership and address changes.
Health Insurance
A divorce decree may outline who will carry and pay for health insurance. If both spouses are working, compare plans and negotiate whose coverage is best suited for benefits and costs.
If you have questions on any aspect of insurance or finances as you navigate the divorce press, talk to your WFA advisor or myself at CPS Horizon, a trusted partner of WFA. Mike@cpshorizon.com