Any couple going through a divorce has the unenviable task of dividing up their property and assets. But a discussion on property division can and should extend well beyond who will keep the house. If you have children, you'll need to consider their futures as well as yours, including how they'll be covered by insurance.
A divorcing couple has an obligation to make sure their children's health care needs are covered by insurance. In many families the children are covered by one parent's health insurance plan or the other. When that family breaks up, the parents may determine whose insurance covers the children based on whose plan -- either a group plan offered by an employer or a private insurance policy -- offers better coverage.
But because almost no health insurance plan covers every last medical expense, divorced parents must decide how those extra costs will be covered. Many parents will chose to split them 50-50, but when there's a wide disparity between parent incomes, a former couple can also decide to prorate the expenses according to their salaries.
Sometimes after a divorce, the custodial parent will move to another state where their health insurance provider may not operate. If your insurance company won't write a policy for coverage in the new home state, you and your child's other parent may need to go back to court if you can't decide how to cover your children's health insurance needs.
Other forms of insurance to consider in divorce are life insurance and car insurance. If your former spouse is listed as the beneficiary on your policy and you feel confident your child will receive those benefits if you die, then you may not need to make any changes. But if there's any doubt, you might consider setting up a trust to ensure that your children receive your life insurance benefits.
When it comes to car insurance, there are no set rules in family court, so it's up to parents to decide who will cover a teen son or daughter with their policies. Parents with sole custody should include the teen on their plan, but in shared custody situations, both parents should list the teen on their policies.
Remember that you can always make changes to your policies if necessary. But just as you don't want to go without coverage yourself, you have a duty to make sure your children are covered by insurance in the event of an emergency.
Source: Fox Business, "Split Time: Kids, Custody and Insurance," Susan Ladika, Dec. 6, 2012
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