Kids’ insurance issues must be addressed

On behalf of The Walters Law Group, Ltd. posted in Family Law on Friday, December 21, 2012.

When working on a divorce settlement agreement in Chicago or anywhere else, an equitable division of assets and liabilities is a primary goal of family court. The issue of how to split insurance coverage is often left to flounder until it takes center stage in the family law matter.

The always important topic of health insurance seldom causes conflict and disagreement. Typically, the parent who has been responsible for health coverage will continue to do so. Most divorcing couples, however contentious their battles over asset division may be, seem to understand that the parent with the better health insurance will accept this responsibility.

Similarly, those medical expenses not covered by insurance usually often involve a 50-50 split by parents. When there is a significant disparity in the income of one parent versus the other, the responsibility split of cost generally follows the income size. For example, if one parent earns 75 percent of the monthly income, that parent will often agree to pay 75 percent of the out-of-pocket medical expenses. The other parent can then pay 25 percent of these costs.

Car insurance and teen drivers, however, can become a subject of strong debate. When parents agree on shared custody, this issue can take on a life of its own.

The Insurance Information Institute (III) recommends that parents discuss this issue with their insurance agents or advisers to ensure they have the right coverage for their teen driver. If one parent has sole custody, the child should be on their policy.

Parents with shared custody should put teen drivers on both of their insurance policies. This protects both the teen and the parents.

If the parents have life insurance on the children, the court typically requires the coverage to be kept in force after the divorce. The parents must also agree on beneficiaries for these policies.

Do you see the need for settling insurance issues for the sake of protecting the children during a divorce? Should the divorcing parents discuss this issue before it becomes a source of contention?

Source: Fox Business, “Split Time: Kids, Custody and Insurance,” Susan Ladika, Dec. 6, 2012