ORLANDO, Fla. —Disappears … Just mention the word and it hurts. No matter the circumstances it is unfortunate, yet according to national statistics nearly 50% of all marriages end up divorced. This is alarming not only because of the grievance it brings to the entire family, kids especially, and friends who are obligated to press the reset button, even when they had nothing to do with the unpleasant current situation.
Not only divorced couples need to divide their material goods, but oftentimes, friends and loved ones (including pets) feel the need to choose sides. We understand that some cases are completely necessary, still beyond sad, nevertheless.
Even among those who finish their relationship in the best terms, divorce can have a serious impact on one’s credit standing, both in terms of dividing joint debt that exists at the time of divorce and expenses that come with starting over.
It should come not as a surprise to you that it also has insurance implications.
If you managed to take good care of the family unit you both built together, you must’ve had considered key areas of your daily routines and lifestyle to protect. The most common are the house, the cars, health, disability and life.
Your insurance company will need to know when there is a change in residence address and property coverage.
If one party leaves and receives the jewelry in the divorce settlement, the insurer will need to know whether to cancel any special coverage for expensive jewelry.
If security modifications are made to the home, because one party is now living alone, you must tell the insurance company. Those security upgrades may qualify for a discounted rate.
In some cases it is necessary to move from a owner occupied home to a rental property and you should consider renter’s insurance coverage to protect personal possessions and liability.
Since you will need to decide who stays with the car or which one, your insurance company must be informed of who will now be the driver of each car and changes if any in the type or amount of driving that will now be done.
Removing a former spouse from the insurance policy also protects you from possible liability if they are involved in an accident and get sued. These details will have an effect on your insurance premium.
Disability insurance should be addressed in the divorce decree. As with a life insurance policy, the former spouse receiving financial support should own the policy and pay the premiums to make sure that the policy remains in force and that the beneficiaries are not changed. The funds for this insurance should be represented in the amount of financial support the spouse and children receive.
One out of the many things you’re going to think about, is whether or not to continue the life insurance after divorce. If the spouse who is providing alimony and child support dies, it means loss of income. Some divorced couples may also consider keeping (or purchasing) life insurance on the spouse who has the primary responsibility for raising the children. If he or she dies, costly childcare will need to be arranged and it must be included in the divorce decree. This way, the spouse receiving alimony can make sure the premiums are paid and he or she is financially protected with life insurance. If a divorced couple is purchasing life insurance to provide financial protection for the children and money is tight, they may want to consider purchasing term coverage rather than whole life. Term is generally cheaper and it is designed to provide protection for a specific period of time – for example, until the children reach the age of 21.
Military spouses who divorce should be aware of the Uniformed Services Former Spouse Protection Act, which recognizes the contributions that former spouses made to support the service member’s career and entitles the former spouse to a portion of the retirement pay. More information can be accessed at www.dfas.mil. Life changing events like a divorce are significant personal events that may impact your life insurance or other federal benefits.
Call one of our courteous agents at Orlando Insurance Center to discuss your personal situation and determine which choices can be more beneficial for each of the family members.
ENJOY LIFE RESPONSIBLY!