During a divorce, many individuals focus on the emotional and financial aspects, often overlooking health insurance as a critical concern. However, health insurance plays a vital role in ensuring your well-being after the divorce. Typically, you and your spouse are covered under each other’s employer-sponsored plans, which also extends to children if applicable. After the divorce, however, you may lose coverage under your spouse’s insurance. It’s essential to address these health insurance issues during your divorce proceedings to ensure you have the necessary coverage moving forward.
Health insurance will be an issue that is covered in your final decree of divorce
Health insurance has become an increasingly important topic within our society. As a result, it has also become equally important as it pertains to divorce cases. Your final decree of divorce (the document that will complete your divorce case) may contain provisions that order you to maintain your ex-spouse as an insured on the health insurance plan that you have for yourself and your kids.
You see situations like this arise most frequently when an ex-spouse has not worked outside the house and is reliant on health insurance. If you have children who need health insurance coverage, you will undoubtedly be ordered to maintain that coverage. You and your ex-spouse would likely split the responsibility of paying for out-of-pocket and non-insurable charges.
Depending on the specific provisions of your health insurance plan, you may have to pay additional premiums or a high single premium for coverage after the divorce regarding your ex-spouse and your children. In some instances, you will be able to maintain coverage for these folks after the divorce. This is especially true for group plans and policies. Group family plans may cost less money than covering two adults with a single project.
Make sure that your children have health insurance coverage with no lapses
Your children will need to be covered by health insurance from some source both during the divorce and in the years after the divorce until that child turns 18. Health insurance would either be provided by an employer-based health insurance policy, through a private policy bought by you or your spouse, or through a government plan like Medicaid. If you choose the government plan, you or your ex-spouse must reimburse the state for this expense incurred on behalf of your children.
Within the final decree of divorce itself, health insurance would fall under the heading of child support. You will need to the layout which is responsible for paying what when it comes to health insurance. I mention this because a judge will not sign a final decree of divorce until some provision exists.
When you may need life insurance based on various stages of your life
Life insurance is not for everyone. Instead, ask yourself this question to determine if you need life insurance: If you were to die, would anyone else (such as a spouse or children) rely on your income for their livelihood, putting their well-being at risk? If you were single, had no children, and had a few thousand dollars in a savings account, then you likely wouldn’t need life insurance. However, if you are reading this blog post, I can safely assume that you are not in that sort of position, however.
Getting a divorce as a young adult
When you are in your late teens and early twenties, you are becoming more self-sufficient but still may have limited resources and limited funds in the bank. This is relevant if you die. Who would pay for a funeral, burial costs, and any other assorted expenses associated with your passing? You should do your best to ensure that you have an emergency fund for yourself while you are alive. If you were to pass away suddenly, your life insurance payout could cover funeral expenses.
Your passing as a young person may not create a hardship for your spouse if they also have an income. If you have a mortgage or other real estate payments, your spouse may struggle to cover those expenses without your income. In this circumstance, even though you are still young, buying life insurance would be a good idea.
If you are divorcing at a relatively young age and do not have children, your need for life insurance is minimal. The only exception to this will be if you are ordered to pay spousal maintenance or contractual alimony. If so, then your judge may request you to take out a life insurance policy to ensure that the money can be paid to your ex-spouse after you pass away.
Getting older means the need for life insurance likely increases
Once you get a little older, your need for life insurance will likely increase. Now you have a mortgage, a child, and additional responsibilities that require financial expenditures that dwarf life in your early 20’s. This is doubly true if your spouse does not work and contributes nothing monetarily to your home. Your passing away could be a catastrophe for your family if you were the only source of income for your household.
Mindful home buying
Buying a house should mean that you and your spouse stayed on budget and figured out what you all could afford. However, my impression is that most young, married couples with children tend to overbuy rather than underbuy when it comes to the family home. Buying a house at the top of the family budget is one thing. It’s a different story when one spouse passes away and the family loses half (or more) of their income.
Amid illness and hardship, debts of other kinds are likely to arise. Using credit cards can provide a quick solution for covering medication costs, but it often leads to neglecting the associated expenses. All you have to do is make a measly minimum payment at some point before the end of the month, and you will be ok, right? When difficulties in life attack you, be sure that you do not spend money on credit cards to cover up the pain you are experiencing.
Protecting your financial future through life insurance
I recommend that anyone going through a divorce and expecting to receive child support or spousal maintenance from an ex-spouse request a life insurance policy on that spouse. This way, you can gain peace of mind knowing that, if something unfortunate happens to your spouse, your primary source of income will remain secure.
The other factor that I will talk to clients about is whether or not it will become necessary for them to begin caring for an aging parent in the years following their divorce. If you have a sick or ailing parent you may become responsible for; you may need to go ahead and ask that your spouse take out an even more significant amount of life insurance.
What if you already have a life insurance policy through your employer
This is a question that I sometimes receive from clients- they have insurance provided by their employer, and they wonder whether or not an additional policy is necessary. The bottom line is that this policy will be canceled as soon as you leave the company. This will leave your family high and dry without a policy in place. You can do to prevent a scene like this from playing out is to apply for and take out another life insurance policy that can stay with you even after you leave your company.
The other thing that I have noticed in my time as a family law attorney is that the policies that people provide through their employers are not sufficient in terms of a payoff amount. A free $50,000 policy from work is not a bad thing, but it is insufficient as far as providing an income for your family moving forward. A good rule of thumb is to purchase life insurance that pays out at 10x your average annual income.
As your income and other life circumstances change, you must change your policy if necessary. Having coverage that is not up to date can be disastrous if an unforeseen death occurs. You do not want to go through all the trouble of having a life insurance plan, but having its payout insufficient for your purposes.
We have already walked through the circumstances of your life that can change in just a short period: a spouse, children, and a mortgage all change the game as far as life insurance is concerned. Any debts that you owe associated with an unincorporated business may fall to your estate to pay.
Life insurance in the years after a divorce
If you and your spouse decide to get a divorce, you have to decide what route you want to go as far as life insurance is concerned. Coverage and beneficiary issues arise when you get a divorce. Having children makes the analysis even more complex. However, if you and your spouse do not have children, then all you need to do is update your beneficiaries, and the insurance company knows you are single and no longer married.
If you have kids, you will want to make sure that they are provided for as beneficiaries under the policy. The thing that you do not want to have happened is your ex-spouse to collect under the policy. That’s not to say that your ex-spouse would squirrel away the money and not get it to your children, but it would create an unnecessarily complex set of steps for your ex-spouse to have to get your children the money that should have been theirs.
You may end up having to purchase a new life insurance plan if your spouse owns the existing project or change the beneficiary on the current plan from your spouse to your kids. A trust may have already been set up for your kids until they turn 18. The trust can be listed as a beneficiary that would be paid the benefits under the life insurance policy at the time of your death.
Handling issues related to life insurance for older divorcees
Life insurance probably is not necessary for you as a person getting a divorce in your golden years. The fewer people in the world who depend on your income for subsistence, the less likely you are to need life insurance. The other thing to keep in mind is that you (hopefully) have been saving and investing diligently throughout your life. This means that if you are not paying your ex-spouse any support and have no children under 18, the need for life insurance in connection with a divorce is zero. You can speak with your attorney more about this, but I do not see a need for it under these sorts of circumstances.
In conclusion, understanding health insurance and divorce is crucial to ensuring that both you and your children remain adequately covered after the divorce is finalized. As you navigate the legal process, make sure to discuss health insurance options with your attorney to ensure a smooth transition and avoid any gaps in coverage. Whether you need to explore COBRA continuation, individual plans, or other options, addressing health insurance during your divorce can prevent unexpected issues down the road. Prioritizing your health and well-being is just as important as finalizing the financial and custodial aspects of your divorce.
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Bryan Fagan, a native of Atascocita, Texas, is a dedicated family law attorney inspired by John Grisham’s “The Pelican Brief.” He is the first lawyer in his family, which includes two adopted brothers. Bryan’s commitment to family is personal and professional; he cared for his grandmother with Alzheimer’s while completing his degree and attended the South Texas College of Law at night.
Married with three children, Bryan’s personal experiences enrich his understanding of family dynamics, which is central to his legal practice. He specializes in family law, offering innovative and efficient legal services. A certified member of the College of the State Bar of Texas, Bryan is part of an elite group of legal professionals committed to ongoing education and high-level expertise.
His legal practice covers divorce, custody disputes, property disputes, adoption, paternity, and mediation. Bryan is also experienced in drafting marital property agreements. He leads a team dedicated to complex family law cases and protecting families from false CPS allegations.
Based in Houston, Bryan is active in the Houston Family Law Sector of the Houston Bar Association and various family law groups in Texas. His deep understanding of family values and his professional dedication make him a compassionate advocate for families navigating Texas family law.
