Which insurance products should I consider if getting a divorce?

Going through a divorce can be stressful and disruptive. Make sure you take the time to ensure that you and your loved ones are protected by reviewing your current insurance coverages, and how they'll change after the divorce.

Auto insurance changes

Car insurance is required to be purchased by the owner of a car-"and ownership is typically settled by agreement in a divorce. You may need to re-establish your own insurance if your spouse takes you off the policy that person now owns solely. It's your responsibility to make sure you've got insurance, and to prevent a potentially expensive lapse in coverage. Unfortunately, you may no longer qualify for multiple car discounts and reduced rates for married couples, and you may no longer get a discount from bundling your car and home insurance if you no longer live in the same place.

There are several things you can do to manage your auto insurance costs. First, shop around to make sure you get the best rates. Different car insurance companies rate in different ways, and your current insurance company may not offer you a similar rate as before now that you're single.

Second, determine whether you need the same level of coverage as you did when you were married. It's likely that the coverage amounts you chose when married were based on joint assets. You may have different assets now and therefore different coverage needs.

Life insurance

First, determine the owners of any existing life insurance policies, as it's the owner (and not the insured or the beneficiaries) that determines any changes that takes place on the policy. If beneficiaries need to be changed, the owner has to make those changes. Make sure to review who the beneficiaries are, and whether or not they need to be changed. This may be something that's defined by a separation agreement or final divorce papers.

Next, your coverage amount will need to be reviewed. Consider why any life insurance was purchased before the divorce, and decide whether or not those circumstances still apply. If the policy was bought to cover children through college, for example, it's likely that the same amount of coverage will be required. Life insurance may also have to cover alimony and child support payments after a death.'

What about health insurance?

Were you covered under your spouse's employer's plan? Was your spouse on your employer's plan? Make sure that you and your children, if any, are covered. You want to keep yourself and your children healthy and provide for the best medical care possible, so health insurance is an absolute necessity. It can protect you from financial ruin if a serious injury or illness occurs. Make sure you understand how your policy works and who is covered-"and when coverage ends in the event of a divorce.

If you do need to purchase your own coverage after a divorce, it's important to understand the options for traditional plans and lower-cost catastrophic health insurance plans, which are set up with high deductibles and often coupled with a Health Savings Account. If you're healthy and do not need to include others on your policy, a high deductible plan may help you save money, while offering coverage for a serious event.