It might seem strange to think about, but divorce insurance really does exist! This is not the same thing as pre-nuptual insurance. Some may feel that divorce insurance sounds like an incredibly negative type of insurance policy. Others, however, might decide that the benefits of having this kind of insurance is something they are interested in at least checking out.
Everyone assumes that they will experience a nearly perfect, “happily ever after”, kind of marriage. Some couples will be comfortable signing a pre-nuptual agreement before they say “I do”. A pre-nuptual agreement is a written contract that legally defines certain things if the couple becomes divorced. It specifies what possessions will become the property of whom, and how future earnings will be divided. This type of contract is generally seen as a form of protection. If you are expecting to receive an inheritance, or have reason to believe that you will have a high income through most of your marriage, it prevents the other person from receiving it in the case of a divorce.
Most people would consider divorce to be a last resort, after everything else has already been tried in an effort to save a marriage. Some people will not ever consider divorce, no matter what, due to their religious beliefs. It has been said that around half of all marriages end in divorce. Perhaps this is why an insurance company is now offering a divorce insurance policy.
The company is called WedLock and their policy is actually called Divorce Insurance. There are no euphemisms being used here! This policy has been described as a “safety net” in case your marriage fails. It does not protect you from experiencing a divorce. Instead, it helps with some of the financial risk that is involved when two people go through a divorce. A husband, or a wife, can take out a divorce insurance policy without the knowledge of their spouse, if they so desire.
The insurance is sold in units. Each unit is equal to $1,250 in cash of initial coverage, (which is the lowest amount of cash benefit you would receive if you file a claim). The more units you buy, the bigger the payout will be. Each unit is sold for $15.99 per month. This makes it fairly easy to figure out how much you want to purchase, and how much you will be able to afford. If you get divorced, the money from your divorce insurance can help you pay for legal fees, credit card debt from the marriage, part of the amount that is left on your mortgage, or to help you relocate. There is a 48 month waiting period from when you first start the policy to when you are able to file a claim.
In the past, insurance companies have avoided creating divorce insurance policies, for ethical and moral reasons. Some might feel that having this kind of policy would encourage a couple to “give up” when things get rough, and “take the easy way out”. On the other hand, it is a good way to protect oneself from the financial burden that a divorce can create.
Image by Sailor Coruscant on Flickr