In New Jersey, it is very common for both parties to be covered by health and life insurance during the marriage, but what happens to these policies when you get divorced?
Health Insurance
In many families, it is not uncommon for one spouse to carry health insurance for the other spouse and their children. Once divorced, the spouse that carries the children will likely continue to do so. Nevertheless, it is generally not possible to continue providing coverage for the other spouse.
As a result, the non-covered spouse will have to obtain his or her own policy following the divorce. This can be done through their own employment, if available. If not, the non-covered spouse can generally obtain interim insurance through COBRA, which allows the continuation of the prior policy for a limited period, generally 18 months.
(While COBRA is available throughout the United States, you should inquire about COBRA Insurance in New Jersey specifically.)
Of course, given that this is generally an added expense for the non-covered spouse, it is a factor that is considered when assessing alimony in New Jersey. In cases that involve extraordinary expenses, such as where one party has a disability or other recurring and significant health issues, the interplay between insurance and support might require special attention to ensure that the supported-spouse is able to obtain appropriate coverage following the divorce.
Life Insurance
Life insurance plays an important role in divorces that involve children, support obligations, or both. While neither party generally has any obligation to maintain life insurance for the benefit of the other, life insurance will generally be required to secure an alimony or child support obligation.
For example, if a spouse has an alimony obligation that will last ten years, and will cost $200,000 over the course of those ten years ($20,000/year), he or she could be obligated to maintain a life insurance policy naming the recipient as beneficiary, in the event the payer dies before his or her alimony obligation ends.
The reason life insurance is necessary is because alimony automatically terminates on the death of the payer, and so without a life insurance policy to secure the obligation, the recipient would have no means of receiving the remaining support to which he or she is entitled.
Similarly, when the parties have children, it is also common for both spouses to maintain some amount of life insurance for the children’s benefit as well, which is intended to secure child support and other expenses for the children, such as college, in the event one of the parties dies before the children are emancipated.
While insurance may not seem like a primary concern in a divorce case, especially when dealing with custody and support issues, it is a critical component to ensuring that a supported-spouse and children are provided financial relief in the event one of the parties dies before his or her support obligations end.
For answers to your questions regarding how health and life insurance will be handled as part of your divorce, Contact Central New Jersey Divorce Attorney Steven M. Cytryn, Esq. today for a consultation. Proudly Serving Central New Jersey, including Middlesex, Monmouth, Somerset, Union and Mercer Counties.
