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Separating insurance policies in a Texas divorce

Insurance can be one of the last things people think about when getting a divorce, but both spouses should review all of their insurance policies and make any necessary changes to them. When a divorce involves children, the divorce agreement may state that the non-custodial parent must provide health insurance for the children. The agreement could also require that one spouse set money aside to cover the other's health insurance premiums.

Splitting life insurance policies could also become complicated. The parties should decide who should retain ownership of each life insurance policy and whether the beneficiaries should remain the same or change. Ownership is important because only the policy owner can make changes to the policy. The couple may even need to obtain a new life insurance policy to ensure that the children and surviving parent can survive if the other parent passes away.

With any home and car insurance policies, the parties can easily split the policies up based on who owns each asset after the divorce. Both parties may also wish to consider purchasing or updating long-term care insurance and disability insurance in case anything happens since they will not be able to rely on each other to cover any future issues. The costs on all of these policies may increase during a divorce because the couple could lose their multi-policy and married discounts.

When a married couple is going through a divorce, insurance policy allocation should be a part of the asset division process. This can help both parties to better understand how separating their policies will affect them. They should have accurate totals for their new insurance premiums so that they can include them in their list of expenses before they finalize their settlement.

Source: FOX Business, "How to Uncouple Your Insurance in Divorce", Michele Lerner,, May 31, 2013

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