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Divorcing Maryland residents should examine insurance policies

A divorce can have dramatic effects on all aspects of a person's life, particularly when it comes to one's individual financial well-being. Maryland residents need to be aware of what individual and joint insurance policies are in effect during the process of asset division in a divorce, and should examine all of their individual insurance policies to see what impact a divorce may or may not have on them. An equitable distribution of assets in a divorce must therefore also include an examination of all insurance policies in effect at the time of the divorce. This will ensure that no one is left without the important insurance coverage they need following a divorce.

For example, with respect to car insurance, if the two cars an individual may have previously had on one plan are now at two different residences, separate plans need to be obtained. This can actually result in a reduction in the cost of insurance. Likewise, it may be possible to reduce the amount of one's homeowners' insurance payments after one spouse has left a marital property if one half of the contents of the marital home were taken away.

In regards to life insurance, many times in a high income marriage, a marriage of long duration or a marriage with minor children, a spouse may be required to either maintain an existing life insurance policy or purchase a new one for the other spouse to make sure that alimony or child support payments are protected in the future.

Health insurance may be one of the most important and one of the most overlooked during the divorce process. If divorcees fail to make the proper changes to their health insurance policy following a divorce, an individual could find themselves in a position of not being insured at all or being over or under insured.

That is why it is important to drop one's ex-spouse from a policy or to obtain your own individual health insurance policy if necessary during the divorce process and why the party should find out what the cost of a new health insurance policy will be prior to the distribution of assets. The cost of health insurance can be quite significant and should never be overlooked in the divorce process.

Source: Reuters, "How to untangle your insurance plans in divorce," Geoff Williams, Sept. 11, 2012

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