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DETOUR: Getting A Divorce
Statistically, about 50% of all marriages in the United States end in divorce. If you are going through a divorce, you need to make sure you don't forget about your insurance portfolio. Much of the insurance you have is probably interdependent upon your ex-spouse. Auto Insurance You probably have one auto insurance policy that covers both you and your spouse. You will need to contact your insurance carrier to have them issue separate individual policies for both you and your soon to be ex-spouse. Also, make sure to mention to the carrier any change in name, address and automobile. Health Insurance If you or your soon to be ex-spouse are covered under the same health insurance plan then you will need to obtain separate coverage. Most health insurance companies will not permit an ex-spouse to remain on a family insurance plan. First check to see if coverage is available through either spouses employer; this may be the most cost effective way of obtaining an individual health insurance policy. If not you will need to find coverage on your own. To start with, you need to understand the 3 basic types of individual health insurance. Fee-for-Service: This type of plan lets you visit the healthcare provider of your choice, and it reimburses you for a portion of the expenses. The portion of the medical expenses you are responsible for is called co-insurance which is usually twenty-percent of the charges that are considered reasonable and customary (reasonable and customary charges are the prevailing fees charged by healthcare providers in a particular region of the country). Many fee-for-service plans also have a deductible that must first be met before medical expenses are eligible for reimbursement. In addition, most plans also have "maximum-out-of-pocket expenses" or "stop-loss" provisions that limit the amount of co-insurance a patient is responsible for. After co-insurance payments reach a policy's stop-loss provision, the insurance company pays for the remainder of the annual expenses at one hundred percent of reasonable and customary charges. Fee-for-service plans, like all other types of health insurance, have lifetime limits which place a cap on the total amount of medical expenses an insurance company will pay for. You should look for a policy with unlimited lifetime benefits or at least $1,000,000 in coverage. Health Maintenance Organizations (HMOs): HMOs are managed care health plans that restrict you to a designated network of healthcare providers. Under an HMO, you must select a primary care physician in the network. If you become ill or injured (non emergency) then you must first visit your primary care physician before being referred to a specialist. HMO's usually pay for all of your medical expenses except for a small co-payment which is your responsibility for each visit to your healthcare provider. HMOs will not reimburse you for any medical expenses if you obtain care outside of the HMO network unless you HMO plan has a POS (Point of Service) option. POS gives you the flexibility of going outside the HMO network for medical treatment; however, the insurance company will only reimburse you for a portion of the expenses subject to co-insurance. HMOs are the most restrictive type of health plans available but are also among the least expensive types of health insurance. Preferred Provider Organizations (PPOs): PPOs are a type of managed care plan that gives you financial incentive to use specified or preferred healthcare providers. If you visit a preferred healthcare provider the insurance company will usually pay for all of the medical expenses after you pay a small co-payment which is usually $10-$20. PPOs also give you the flexibility of using doctors or hospitals out of the PPO network; however, you will be responsible for co-insurance payments similar to those in fee-for-service health insurance plans. PPOs differ from HMOs in that you have the freedom to choose any healthcare provider at anytime. Life Insurance Whether or not you and your soon to be ex-spouse own life insurance it is very important to review your needs and make any appropriate changes. If one spouse is required to make alimony or child support payments then it is important to make sure that this spouse's life is insured so that alimony and child support payments could continue in the event of their death. If you need help determining the amount of life insurance needed then use the ReliaQuote Needs Calculator. Other factors to take into consideration are changing beneficiaries on existing life insurance policies and ensuring that the coverage amounts are correct. Home Insurance Who gets the house? This may be the biggest issue in a divorce since it is probably your most valuable asset. Regardless of who gets the house, changes should be made to your homeowners policy. First, the policy will need to be placed in the name of the spouse who gets the house. In addition, a review should be done to make sure that personal property coverage limits are adjusted. Most likely the coverage amounts will need to be reduced since many of the asset will be split between both you and your spouse. See Also: Buying a Car Starting a New Job Buying a Home Renting a Home Getting Married Becoming a Parent Loss of a Loved One Child Leaves Home Retirement Prep |
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