Chapter 10 Protecting Against Risks to Life, Health, and Property

• Library: Divorce & Money (Nolo) (2020 Ed.)

CHAPTER 10: Protecting Against Risks to Life, Health, and Property

Insurance

Health Insurance

Life Insurance

Disability Insurance

Business Continuation Coverage

Property and Estate Protection

Title Documents

Wills, Trusts, and Other Estate Planning Documents

Questions to Ask an Attorney

If you had no choice but to drive through a snowstorm on a curvy road, you would no doubt put chains on the tires and check the antifreeze. In navigating through your divorce, you must also take precautions if you are to survive financially.

Use this chapter to "check the antifreeze"—that is, to make sure you are doing what you can to reduce risks and protect yourself and your property.

Insurance

Insurance is designed to protect you from financial disaster. But when you divorce, your coverage itself may be at risk. Because policies can make for boring reading, and almost no one thinks about this subject until it's too late, insurance needs are commonly forgotten during divorce.

To demonstrate the importance of insurance in your life, ask yourself: If I were in an accident or became ill, how would I pay my medical expenses?

Of course, being aware of what can happen without insurance and doing something about your situation are two different things. Review the steps below, then follow up.

Health Insurance

Find copies of the policy under which you are currently covered. Check with your insurance agent to be certain that you and your children are still covered. Find out how long your current policy will remain in effect and what the costs will be for the next six months to one year.

If you are covered under a group policy, you may need to speak to the personnel office or a special agent who handles the company's health care insurance. If your family is covered by your spouse's insurance, you will be able to keep your coverage for 36 months after the divorce. (See "Keeping Health Care Coverage Through Your Spouse's Employer Under COBRA," below.)

Keeping Health Care Coverage Through Your Spouse's Employer Under COBRA

If your health insurance is provided through a plan offered by your spouse's employer, and 20 or more people work for that employer, you can continue your health care coverage for a period of time after the divorce. Under the federal COBRA (Consolidated Omnibus Budget Reform Act) law, divorced spouses of employed medical plan participants can pay for their own coverage for up to 36 months after the divorce is final. Under the law, the premiums you're charged for the COBRA coverage may not exceed 102% of what the employer pays to cover you. But you should check the costs of other health plans before deciding to get COBRA coverage through your spouse's employer. (For more information, contact your local office of the federal Department of Labor and check the department's website, www.dol.gov—choose "Health Plans & Benefits: Continuation of Health Coverage—COBRA," under the "Topics" tab.)

Your spouse's employer must inform you of your right to continue the coverage when your divorce becomes final. Don't leave it to your ex-spouse to notify the employer of that date. You should contact your ex-spouse's employer (probably the human resources department) and request the continued health care coverage as soon as your divorce is final.

Remember, the maximum length of time you can continue the coverage is 36 months. If you are healthy, start looking into individual coverage immediately. It may cost less than the continued group coverage. (Ask whether the provider of your continued coverage offers conversion to individual coverage. Be aware that such plans are usually expensive and limited in benefits.) Also, if you get a new job that provides group health insurance or if you remarry and your new spouse's employer offers group coverage, your continued coverage will usually be terminated.

Even if your ex-spouse's employer has fewer than 20 employees, state law may require the employer to provide COBRA-type benefits. For more information, contact...