Insurance Considerations During a Divorce

Latrice Knighton is a member of the Sterling Law Offices partner team and an award-winning divorce attorney, life coach, and speaker. She helps clients resolve their problems by using legal techniques and smart tactics learned through decades of experience as well as helping clients by offering the best practical advice.

by | Jul 11, 2019

Your health is the most important asset you have, and health insurance coverage is a close second.

If your health insurance is through your spouse's employer, then you could be in trouble.

Everyone going through a divorce wants to have that financial security for their loved ones. Today, we're focusing on insurance. More specifically: about life insurance, disability, and long term care. 

This session will discuss long term care insurance. Listen to Michael Smith, of CPS Horizon Financial, for tips and considerations on insurance policies during a divorce.

What is CPS Horizon Financial?

An independent insurance agency specializing in life insurance, disability, and long term care.

What will this session cover?

This session will discuss long term care insurance.

What are some extended health care issues during a divorce?

You are each other's support plan when you were in marriage, and “in sickness and in health” no longer applies.

Consider a form of long term care insurance.

If you’re 50 or older, you may want to consider a form of insurance to help provide the money needed if an extended health care event occur.

What are the most common ways to use a form of insurance to pay for long term care (LTC)?

Traditional Long Term Care Insurance which would provide home health care, assisted living, or nursing home services. Life Insurance with a Long Term Care Rider would grant a person access to the face amount while alive to pay for LTC services. Lastly, Reposition an existing assets to provide LTC Services with an existing asset being like an annuity, CD, savings account, or stock portfolio.

How much is Long Term Care Insurance?

Listed are different costs for different ages in the graphic.

An example of using this table would be to look at the monthly benefit policy of $6,000 and then look for what can be expected at a specific age range. For a 55 year old couple, it has a total annual premium of $2,866.

What happens if I have existing life insurance with a cash value?

Consider restructuring it with a long term care rider. It provides access to a percentage of the death benefit while alive to help pay for LTC services.

Example: A $300,000 policy with a 2% LTC rider = $6,000 per month

What is a real world example of Long Term Care Insurance?

  • 58 year old woman is getting a divorce
  • Current life insurance: $32,000 of life insurance with a $21,000 cash value
  • Solution: Switched cash value and obtained $112,000 of life insurance with $4,480 LTC rider no future premiums.

How can clients contact you?

Michael Smith, LUTCF
President
CPS Horizon Financial
(414) 427-8660
[email protected]


References: Michael Smith, CPS Horizon Financial Website

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