In today's society, there appears to be insurance coverage for almost every significant asset. From health insurance to auto insurance to everything in between, individuals are willing to spend a substantial amount of money for the peace of mind that comes along with adequate coverage under an insurance policy. However, certain types of insurance can get placed on the back burner when a Massachusetts divorce is pending, leaving many people exposed to financial harm if they are unable to address many of the insurance issues during the divorce negotiation process.
Untangling insurance issues is something that should be taken care of prior to a final divorce order being issued. Although many individuals may be tempted into keeping their insurance company out of the loop with regards to the divorce, this method of non-disclosure can result in serious consequences if the insurance company finds out. Given that a spouse may be entitled to temporary health insurance coverage under the other spouse's COBRA policy, this coverage may give the individual some breathing room when it comes to them being forced to find their own coverage.
Life insurance is another issue that is sometimes not discussed during the divorce proceeding. Responsibilities for maintaining a life insurance plan can be a matter addressed in a divorce order and thus, should be discussed prior to any documents being signed. This policy can be especially valuable when there are minor children who, if one parent dies, will continue to be protected financially through a life insurance plan.
Understanding an insurance policy can be difficult, especially for those Massachusetts citizens who have had little to do with the policy until they are involved in a divorce proceeding. Understanding the options available to them and the potential financial ramifications may assist them in ensuring that they are fully protected in the final divorce order. This process can be beneficial to both sides of the divorce as they try and untangle the joint matters that made up the marriage and transform them into two separate entities that represent their own personal interests.
Source: Reuters, "How to untangle your insurance plans in divorce," Geoff Williams, Sept. 11, 2012