Divorce Insurance for the Matrimonially Unsure
For the latest piece of evidence that the world is an increasingly cynical case, there’s now an insurance option for those who are not convinced that their vows will stick: divorce insurance.
The product, called WedLock, comes from SafeGuard Guaranty Corp., a company that claims to have created the first divorce insurance product that the world has ever seen, according to the New York Times.
The WedLock insurance policy will pay out its coverage in cash to cover legal fees and set-up for a new house in case of divorce. They sell these policies in monthly units of protection, and those who want to be covered pay a monthly installment of about $16. With each payment of $16 comes $1,250 in coverage, and the coverage accumulates with each payment that you make.
Also, as a bonus for those who continue to question the health of their marriage, SafeGuard will add $250 per year, per unit, to the coverage amount.
If you did get a divorce, you would simply send the company proof of divorce, and receive the amount that you are covered for in a lump sum.
The folks at SafeGuard have developed quite the strategy for preventing people from gaming the system and buying an insurance policy when they already know that they will be getting a divorce. One way is to make it so that a policy does not mature until 48 months after the policy’s effective date. There is, however, a premium for those who are especially jumpy and want to reduce the maturity period to 36 months.
Another rider available for purchase allows a policy holder to get their premiums back should they divorce before the allotted number of months has passed.
Another potential problem could be the high level of risk that SafeGuard could take on if a person or couple was particularly volatile in relationships, or had a family history of divorce. John A. Logan, the CEO of SafeGuard, assured the New York Times that the appropriate research had been done, and that even in a worst case scenario in which every policy holder got a divorce, the policies would not all pay out at the same time.
And why shouldn’t couples simply put the $16 per month into an investment that might create a bigger return than the insurance policy? Or what about the idea that some divorces aren’t expensive, but amicable?
Beware of an ex-spouse who could end up with that nest egg, says Logan.
“There is nothing to stop your spouse from raiding those investments and taking it all,” said the pessimistic Logan. “And then with all the money gone, you’re left with all the legal bills.”
Unsurprisingly, perhaps, Logan’s inspiration for the WedLock product sprung from his own personal experience with a divorce that presumably cost him dearly.
Logan is asking for couples to have more faith in his company than in their own marriages, too, as currently these policies aren’t covered by any state guaranty funds. So if SafeGuard goes bankrupt, and Logan finds himself divorced from his company, you are out of luck.
