Insuring Against Divorce
There is insurance for nearly everything these days. From automobiles, to health, home, life and even tuition, we have grown to expect an option to be insured.
Now, Safeguard Guaranty Corporation, created by entrepreneur John Logan, is offering insurance against divorce.
These policies are available to individuals, meaning the wife or husband could each obtain their own insurance without involving the other partner. In fact, there isn’t even a need to inform your spouse if you chose not to.
Logan recently had an interview with the Chicago Tribune to explain his new and controversial insurance policy.
Essentially, a divorce insurance plan works like any other type of insurance. You pay your monthly premium, and if the marriage ends in divorce you would receive a payout.
In the article, Logan describes the plan as having a $15.99 cost per unit per month. You would select how many units you would like to have, and pay that amount multiplied by $15.99 per month. The payouts reflect the amount of units you purchase.
If you had a 10 unit policy, your monthly payment would be $159.90. If your marriage then lasts five years, you would have paid in $9,594, but your payout would be $15,000. This could be helpful money for attorney fees or to help with temporary housing until you can figure out permanent living arraignments.
For the same policy for 10 years, your payout would be $27,500 after paying in $19,188 for a net $6,312.
When asked how it is possible to prevent people from committing fraud or marriage/divorce for profit schemes, Logan explained:
When someone buys our policy, they have to pay in for a minimum of 48 months before they can file a claim to be paid… [a policy holder can cancel at anytime] but this is a casualty (or liability) policy, like a car insurance policy, which means it has no accruing investment or surrender value. No one gets any money back if they cancel.
Logan also stated that a parent could buy one for a child who is about to enter into a marriage that the parent doesn’t support. And, similar to how your spouse wouldn’t have to know of your policy, the child wouldn’t have to know that the parent took out a policy on their marriage.
The caveat to purchasing insurance for your child’s marriage is that the parent cannot be the beneficiary.
“The parent has to identify who the insured is. And the insured has to be immediately related.”
Taking out a policy for your child because of you doubt the stability of his or her marriage could clearly become a source of conflict if your child finds out. The wisdom behind creating an insurance policy like this is yet untested, but it is an option for those who fear what a divorce would do to their finances.
