Once their divorce is final, she is no longer his immediate family member and cannot be covered on his insurance policy, although the children may still be. His retirement will be divided according to how many years they've been married, and what percentage of the marital assets she will get, and that division will take place upon their divorce, she will have no interest in future retirement funds. What he accumulates after their divorce is separate.
Kentucky is a no-fault state, and marital infidelity is irrelevant to the proceedings. If he is "not contesting" the divorce, that means he is agreeing to the terms that she is putting forth for asset and debt division, as well as child custody and support. Hopefully he is represented by counsel so he does not get a raw deal.
