I just got divorced. Never worked. Received settlement from spouse's IRA. Need to buy medical insurance. No job prospects. If I withdraw from IRA to pay insurance can I avoid early withdrawla penalty.
The answer to your question appears to be no. Since you have never worked and thus have not received unemployment benefits, you wouldn't qualify under the conditions set out below. That being said you can still pay for the medical expenses out of pocket and then take the distribution for that. Keep in mind there are limits to those as well. If you aren't working with a CPA or tax adviser, it is probably time to start. These can be complex and confusing issues and the cost of getting them wrong can be significant.
"Medical insurance. Even if you are under age 59½, you may not have to pay the 10% additional tax on distributions during the year that are not more than the amount you paid during the year for medical insurance for yourself, your spouse, and your dependents. You will not have to pay the tax on these amounts if all of the following conditions apply.
You lost your job.
You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.
You receive the distributions during either the year you received the unemployment compensation or the following year.
You receive the distributions no later than 60 days after you have been reemployed."