Of all the topics in the world that I could think to write about, I can’t think of many that are less exciting than divorce and insurance. Imagine yourself at a party and think of what the person you’re talking to will do when you bring up one of these topics. Run the other way? Stare off into space? Quickly change the subject? I think any of these options are viable ones. I can’t say that I would blame that person. Nobody has fun thinking about divorce or insurance.
However, that does not change the fact that both of these subjects are important. Adults have to come to grips and take seriously a range of topics that are unpleasant out of doing the right thing and taking responsibility for our actions. If you find yourself in a position where you are getting a divorce or are about to start that process, you not only need to know about divorce but about the potential ramifications on your life.
Changes to your life mean that you need to take stock of what sort of insurance coverage you have and what changes need to be made in light of the changes in your personal life. We discussed earlier this week how you may need to update life insurance beneficiaries after your divorce. If you owe child support it may be required that you open up a life insurance policy so that in the event you pass away before your child turns 18 that the life insurance proceeds could be invested to help raise your child.
Likewise, we covered everybody's favorite topic of health insurance and what you can do if you are getting divorced and will lose your insurance. These are real-life issues that will impact you in the years beyond your divorce. However, there is so much else going on in a divorce that we can easily lose track of less obvious, yet still important, topics like insurance.
Today we will wrap up this topic and hopefully share some additional insights with you that can positively impact your divorce case and the rest of your life. The reality is that nothing you read about insurance is going to be earth-shattering but it can have a lasting impact- especially if you learn something that you had no clue about previously. As you quickly discover- when it comes to divorce what you don't know can hurt you.
Disability insurance and divorce
Disability insurance is one of those things that most folks don't consider as being relevant. If you work a "typical" desk job in an office, the chances of you being injured on the job are pretty slim. Most of us don't live lives that require a great deal of danger, either. Stepping on one of our kids' toys or being rear-ended in traffic are about the extent to which we could be injured daily that results in a disabling condition.
However, allow me to paint a worst-case scenario picture for you to consider. What happens if you do get hurt and are forced to stop working for some time? Would your job hold open your position while you were out? Would your work allow you to come back on restricted duty? Many employers will not take the steps necessary to accommodate you as an injured worker. There may be liability issues in play for your employer if they allow you to work while impaired physically or mentally. As a result, there is a higher likelihood than you may be considering that you could be let go from your job.
On top of that, we can add in another issue- your divorce. If you are going to be the custodial parent of your children you will be responsible for their daily care. While you will likely be receiving child support, it will not be enough in all likelihood to support you and your kids on a full-time basis. Therefore, you will still need some income to make sure your rent/mortgage is paid and your kids can eat. If you are injured and cannot work where would that money come from?
As you can see, disability insurance can potentially be a necessity as far as insurance is concerned. The likelihood that you are injured and become disabled is far higher than your dying in an accident or of natural causes. Disability insurance works this way: you will be paid a monthly benefit by the insurance company if you meet their definition of disabled and are unable to work. Typical disability insurance policies allow you to be paid a certain percentage of your monthly income or a set amount of money every month.
Ordered to pay child support? Getting disability insurance is crucial
Suppose that you are a father of three kids and have just gone through a divorce. In that divorce, you were ordered to pay your ex-wife $1500 in child support for your kids. You have been told over and over by your attorney about how important it is to pay the child support in full at the beginning of each month. On a practical level, you want your kids to be able to do all the things that they need so the child support is important. On another level, you also want to keep the state of Texas, the judge and your ex-wife off your back.
Your monthly salary allows you to pay the child support without much issue each month. However, what would you do if you either lost your job or became injured and were unable to work? Do you have a fallback option to take advantage of in that circumstance? Do you have money in the bank? Even if you do have money in the bank will you be able to pay your child support and live off your savings until you can heal up.
There a lot of considerations you need to make after your divorce about disability insurance, child support and the support of your own life. You don’t want to put your kids in a position where they will have to go without something essential because you were not able to pay child support for a couple of months while you are recuperating from an injury. You also do not want to have to deal with a judge yelling at you about not paying child support.
A court may be able to allow you some period of grace as far as paying back child support that you owe. You may also have an ex-spouse who is considerate of your situation and won't even bring a child support enforcement case due to your circumstances. However, the possibility exists that your ex-spouse does bring a child support enforcement case against you to hold you accountable for violations regarding the payment of child support.
Should you hang your hat on receiving Social Security benefits if you become injured?
Let me take some time to talk to you about Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). These are programs funded through the Social Security Administration that provide disabled people with income. However, the gap between thinking you are disabled and is found to be disabled by the Social Security Administration is a wide one.
SSDI is the insurance benefits that you contribute to through your working life. By paying those taxes you build up credits that allow you to take advantage of SSDI. Think of these credits like health insurance premiums. As long as you are working, you are paying taxes and building up credits. Once you stop working you have a finite period (usually five years) to apply for disability and still have sufficient credits to receive SSDI. So, you cannot stop working this year and then apply for SSDI in 2026 and expect to be able to receive benefits.
On the other hand, almost every American adult is eligible for Supplemental Security. While SSDI tends to pay folks somewhere between $1,000 and $2,000 per month, SSI tends to pay closer to $750. These are the benefits available to folks who have either never worked or have worked so long ago as to not have any credits to allow for SSDI to be paid. SSI is essentially welfare.
The process of being approved for either SSDI or SSI is fairly straightforward but is nonetheless difficult in terms of getting approved. First off, to qualify for disability benefits or SSI you need to have not been working for at least the past 12 months. Next, you need to be suffering from a “severe impairment” as defined by the Social Security Administration that has lasted or is expected to last at least one year in duration.
After that, they will do a review of your past 15 years worth of income to determine what jobs you have worked on a full-time basis. If you are thought to be able to return to work any of those jobs you will not be found to be disabled. Finally, if you cannot work any of those jobs an analysis will be done of the national economy to see if there are any jobs you can work.
If you can pass all of these tests only then will you be found to be disabled? Social Security will allow you to appeal your first couple denials to a judge who will bring you into their offices for an appeal hearing. There you will answer questions about your daily life, past work and medical treatment to provide the judge with additional information about you and your case.
Overall, the rates of success at applying for disability are not high enough for me to tell you with any confidence that you will be successful in an application for disability benefits. This is true even if you have medical records from your doctors that state you cannot work. My overall point is this: do not hang your hat on receiving disability benefits and opt to not insure yourself properly through purchasing disability insurance.
If you own a home then you likely know that homeowner’s insurance covers losses and other damage to your home, as well as personal property inside of your home. If a person is injured on your property then homeowner’s insurance will typically provide coverage in those circumstances.
As you begin your divorce case, I would recommend that you take photos of the items in your home before things go “missing.” I’m not telling you that someone is going to come in and take your items- but you never know. People are not themselves during a divorce so your spouse may end up removing an item thinking it was theirs.
Your homeowner's insurance policy is up for renewal every month. Depending on how long your divorce case takes it may need to be paid during your case. The temporary orders phase will determine how that policy will be paid. Considering how important an asset your home is, it would be terrible if the damage was incurred by your home during the divorce and you were not able to pay for it. Most mortgage lenders require homeowner's insurance be current, as well.
Questions about the material from today’s blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the information that we covered in today’s blog post please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week where we can discuss your case and provide you with specific feedback about your particular circumstances.
Our attorneys represent our clients with a great deal of pride in all of the family courts of southeast Texas. We strive to provide excellent representation and customer service to each of our clients and their families. We thank you for taking the time to read today’s blog post and hope you will join us back here tomorrow.