How does a separation or divorce affect my life insurance - Spencer Insurance Agency, Inc

How does divorce and separation affect my insurance?

 

Here is an important article from our website on how separation and divorce affects your insurance coverage.

You are thinking or have decided that separation or divorce is your only solution.  What do you do now?  We at Spencer Insurance Agency are not attorneys and do not provide legal advice.  However, we understand that separation and divorce have a huge impact on your insurance coverage.

Our goal for this article is to educate you on how divorce or separation can impact your insurance coverage.  We also intend to provide some useful links on topics that are related to your insurance.

What is the first thing I should do? Call us at 215-885-2200 or contact us from our website!!!  Discuss with us your situation so we can make sure you are properly protected while going through this process.

What you need to understand:

  • Privacy laws may prohibit or limit our staff from discussing with you information concerning your spouse.
  • We do not take sides. Since both you and your spouse are our clients, we want to make sure both of you have the proper coverage during this process.
  • We will need written authorization from you to speak to one of your advisors (lawyer, financial planner, insurance agent) concerning any of your insurance coverage.

How will separation or divorce affect my insurance coverage?  Depending on the type of insurance coverage, actions taken by you could have a huge impact on your insurance coverage.  We suggest you call us and discuss your situation. Here are some examples on the impact that divorce and separation have on your insurance protection:

  • Auto Insurance
    • Who is the named insured on your policy?  In your auto policy the words “You” and “Your” are used often to refer to the Named Insured on the Declaration page and the spouse if a resident of the same household.
      • If you are not the named insured and move out of the household, you may not have coverage under your auto policy
      • If you are not the named insured and your spouse moves out of the house, you may not  have coverage under your auto insurance
      • If your spouse is the only named insured, your spouse may be able to delete your vehicle from the auto insurance policy without your knowledge. (Note: If we don’t know you are separating, how can we protect you?)
      • Whose policy will carry your teen drivers?

What is the solution?  That depends on many factors, however it may be best for our agency to split your cars onto separate auto insurance policies

  • Homeowner’s Insurance
    • Who is the named insured on your policy?  The named insured could be one or both spouses and still cause you problems.
      • If both spouses are named insureds and one of you moves into an apartment, you have limited personal property coverage.  Your policy says that personal property at other residences is limited to 10% of your Coverage C limit on your Homeowner’s policy or $1,000, whichever is greater. In regards to liability coverage, the new residence may not be covered if coverage is not extended to that location from the original homeowner’s insurance policy.
      • If you are not a named insured on the Homeowner’s policy and you move into another residence, then you may have no personal property or liability coverage
      • If your spouse is the only named insured, your spouse may delete coverage or endorsements from the homeowner’s policy such as jewelry, musical instrument or other valuable items coverage.
      • Both Named Insureds move out leaving the property vacant.  If a home is left vacant then some of the provisions of the policy may be voided.  You may need to get a Vacant Dwelling policy for the home.

What is the solution?  You may want to purchase a renter’s policy to give you the proper coverage for your new residence.

  • Life Insurance– It is critical that you review your life insurance policies and wills when considering a separation or divorce. Don’t forget the group life insurance policies you purchased through your job.  Check out our Free Report: What you need to know about Life Insurance. . . How to Make sure the People You Intended to get your Life Insurance Benefits Actually Get the Benefits!  You need to consider the following:
    • Is the life insurance on my spouse for the benefit of our children?  What happens when that spouse dies and you no longer receive child support?  To make matters worse, what if your ex-spouse’s life insurance lapsed because of failure to pay the premium?  Discuss with us options available so this does not happen.
    • Whoever owns the life insurance can change the beneficiary at any time.  You may never know the beneficiary change was made. Consider making sure you are an irrevocable beneficiary.  However, this may not matter if the policy lapses for non-payment.
    • Do you need more or less coverage now?
    • What happens if you or your ex-spouse has children with a new spouse?  Who will benefit from the life insurance?
    • Health Insurance– Our agency does not handle Health Insurance but can recommend someone for your needs.  It is very important that you check to make sure your health insurance benefits for you and your children are not impacted by the divorce.  Know the answers before you finalize the divorce.  Check out this link from the US Department of Labor: http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html

Other Important topics you need to consider:

  • Wills– make sure you have updated your wills throughout this process.  Talk to an attorney.
  • Retirement plans and investments. Know your rights.  Talk to your financial planner or get one if you do not have one. Check out this link from the US Department of Labor: http://www.dol.gov/ebsa/publications/qdros.html
  • Social Security Benefits– Make sure you know how your benefits will be impacted by your divorce.  Check out this website from the Social Security Administration: http://www.ssa.gov/retire2/divspouse.htm

Many times the separation and divorce process can be very amicable, especially when children are involved. Even so, our agency usually learns about separation and divorce too late in the process to protect you properly.  Don’t wait until it is too late.  Call us at 215-885-2200.

This information was meant to provide you some guidance when you are considering separation or divorce.  It is not meant to be considered legal or financial advice.  Spencer Insurance Agency suggests you seek the advice of an attorney and financial planner among other professionals.  Your insurance policies will dictate what coverage is provided to you.  Nothing in this article is meant to replace your policy provisions.  Consult your policy and agent for details on coverage provisions.

The words I hate to hear. . .

I didn’t know you sold life insurance. Those are words I hate to hear.

Okay, now you know! Spencer Insurance sells life, disability and long term care insurance too.  My specialty at the agency is in these coverages.  I started my insurance career with John Hancock in the late 80s before joining my Dad’s agency.

I have been selling life insurance for over 30 years.  How many life insurance agents can say that? Most of the people I meet do not even know if their life insurance agent is still in business.  They have not heard from the agent since the policy was purchased. As a father, grandfather and small business owner I understand the needs of parents and small business owners to protect their families and businesses in the event of a death or disability.

Another issue I run into often is that clients rely too much on group life and disability policies. These policies are very helpful and important, however you need us to review the group policies to make sure they provide the coverage you think they provide.  Check out my article “Is my employer paid Long Term Disability Plan enough? When is 60% only 30%.”

You can also check out our life insurance “Frequently Asked Questions.”

Contact us for a review so we can discuss:

  • Do you have the right amount of life and disability insurance? You may have too much or too little.
  • How does a business owner protect their small business from the death of an owner or key employee?
  • What is your small business worth? We have a program that will give you the answer!
  • How much will my spouse receive when my business is sold? (Probably less than 50% of its value if you do no planning.)
  • Can my children and spouse stay in our home if I die? Can the children still go to college?
  • How to use life insurance proceeds while living to pay for long term care expenses.

If you don’t have life insurance what are you waiting for?  Contact us now!  If you do have life insurance call us to review the policy and make sure it is still providing the coverage you need and that the coverage is not running out soon. (We see a lot of people who purchased a 20 year term years ago and don’t realize the premium guarantee is running out.

Whether you just need a $15,000 final expense policy or $1,000,000 in term we can help.

Rely on my 30 years of experience.  Contact us today so you can check it off your “to do” list.

            

Updated Fall Section of our Website now available

Updated Fall Section of our Website now available 

As summer comes to an end and the season of fall begins I wanted to share with you some Fall Safety Tips.  I updated this section with some valuable tips on what you can do today to prevent claims as winter approaches.

You will find home safety tips, car safety tips and teen driver safety tips.  And, since September was Life Insurance Awareness month I included some life insurance tips.

As always contact us if you would like more information or have any questions.

Let me know what you think of this section.

Enjoy the Fall!

 

 

 

Separating or recently divorced? Check in with us!

 

If you or someone you know is recently separated or divorced you should check in with us. The sooner the better.

We recently had a client in Glenside that had car insurance on a policy with her husband.  They were recently separated and the wife moved into an apartment. What she did not understand is this would have huge impact on her car insurance and homeowner’s insurance.

Privacy laws sometimes make it difficult for us to talk to her about her husband.  However, we could quote and issue a car insurance policy on just her car.  We also suggested a renter’s insurance policy for her since she moved out of the home.  The husband would continue with the current policy so his car would also have coverage.

You also need to think about your life insurance policy.  Who should be the beneficiary?  If you have children then it is important to make sure there is a change to the beneficiary to reflect the separation or divorce. You should also discuss with the divorce lawyer your life insurance policies as you want to make sure they continue for the benefit of the children.

It is important to make sure the divorce attorney helps you in these areas but you may need to see a lawyer specializing in estate law.  You will need to update your will, power of attorney and living will.  If you need a referral to an estate attorney contact us.

There are many things related to insurance that you need to consider when getting a separation or divorce.  For more details check out our website article “Getting a divorce or separation.”

As always we are available to review your auto, home and life insurance policies.  We are professionals and our goal is to make sure both spouses have the proper protection in the event of a divorce or separation.  We do not take sides, we just assist both of you.

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