Going Through Divorce

Health Insurance After Divorce

If you were covered under your spouse's employer health plan, divorce is a qualifying life event that triggers your right to COBRA continuation coverage. You can keep the same plan for up to 36 months after the divorce is finalized.

But COBRA is expensive. You'll pay the full premium — which in 2026 averages $600–$800/month for individual coverage and $1,500–$2,000/month for family coverage, plus a 2% administrative fee. Your employer was covering most of this before; now it's all on you.

Alternatives to COBRA:

• ACA Marketplace: Divorce is a qualifying life event that gives you a 60-day special enrollment period. Depending on your post-divorce income, you may qualify for substantial subsidies. This is often much cheaper than COBRA.
• Your own employer plan: If you have access to employer coverage you weren't using, you can enroll during the special enrollment period triggered by losing spousal coverage.

Separating Your Insurance Policies

If you and your spouse shared policies, you'll need to untangle them. Here's what to address:

Auto insurance: If you were on a joint auto policy, you'll each need your own. Notify your insurer as soon as possible — if your ex gets into an accident while still on your policy, it could affect your rates. Get quotes from your current insurer and at least two others, since rates for single policyholders differ from joint ones.

Homeowners/renters insurance: Whoever keeps the home keeps the policy. If you're moving out, you'll need a new renters or homeowners policy at your new address. If neither spouse keeps the home, cancel the policy after the sale closes.

Umbrella insurance: If you had a joint umbrella policy, it should be divided or replaced with individual policies as part of the settlement.

Life insurance: This is where it gets complex. If you have term life policies on each other, decide whether to keep them (especially if one spouse is paying alimony or child support — more on this below).

Update Your Beneficiaries — On Everything

This is the single most overlooked step in divorce, and it can have devastating consequences. A divorce decree does not automatically change your beneficiaries. If your ex is still listed as the beneficiary on your life insurance, 401(k), IRA, or bank accounts, they will receive those assets if something happens to you — regardless of what your divorce decree says.

Update beneficiaries on:

• Life insurance policies (both employer and individual)
• 401(k) and IRA accounts
• Bank and brokerage accounts with TOD (transfer on death) designations
• Annuities and pension plans
• HSA accounts

Insuring Alimony and Child Support with Life Insurance

If a divorce settlement requires one spouse to pay alimony or child support, those payments stop if the payer dies. A term life insurance policy can guarantee the financial obligations continue.

Here's how it works: if you're ordered to pay $2,000/month in alimony for 10 years and $1,500/month in child support for 15 years, you need enough life insurance to cover those obligations.

Rough calculation:

• Alimony: $2,000/month × 12 months × 10 years = $240,000
• Child support: $1,500/month × 12 months × 15 years = $270,000
• Total coverage needed: approximately $510,000

A 35-year-old in good health can get a 20-year, $500,000 term life policy for roughly $25–$40/month. Many divorce decrees specifically require the paying spouse to maintain a certain amount of life insurance — make sure the policy meets the court's requirements.

Auto Insurance Considerations After Divorce

Splitting from a joint auto policy usually means higher rates for both parties. Married couples typically get lower rates than single policyholders. Here's what to know:

If one spouse keeps the existing policy, the other needs to get their own before being removed from the joint policy — otherwise you'll have a gap in coverage, which can spike your rates going forward.

If you're sharing custody and your child drives, both parents may need the child listed on their policies. This can be expensive, so coordinate with your ex to avoid double-insuring the same teen driver if possible.

The Divorce Insurance Checklist