It seems like you can buy insurance for just about any event these days. So it should come as no surprise that there’s such a thing as divorce insurance. No, really. The Safeguard Guaranty Corporation started issuing a divorce policy called WedLock Divorce Insurance in August of 2010. The company no longer markets the Wedlock products but sells their divorce insurance policies under the name Marriage Assurances. This company provides the same coverage as the old WedLock plans. The new policies contain a long term “Successful Marriage Benefit” for policyholders who rather than filing for divorce decide to stay married.
Divorce Insurance Is Not Insurance Against Filing for Divorce
How do these divorce insurance policies work? For one thing, it’s not insurance against filing for divorce. There’s no settlement if the married policyholder gets divorced. These policies might be better described as a form of supplemental unemployment insurance. Divorce insurance is meant to help a divorcee who is unable to meet his or her child or spousal support obligations. Policyholders are only able to collect benefits after their divorce has been finalized.
Marriage Assurances sells divorce insurance policies in units. Each unit costs $15.99 a month; for each unit, you’ll receive $1,250 in coverage. So if you purchase 10 units you’ll receive $12,500 in coverage.
The standard maturation period for the policies is 48 months after the purchase date. The maturation clause is put into place to prevent people from purchasing policies when they know they will be filing for divorce.
After carrying the policy for four consecutive years, the policyholder becomes eligible for the Successful Marriage Benefit, in which each unit gains $250 in value. That means, if a person bought 10 units of coverage and got a divorce after 10 years of marriage, they would have paid $19,188 for the insurance policy and would receive a $27,500 settlement.
The good news is, unlike auto insurance, divorce insurance rates won’t go up if you get remarried.
Is Divorce Insurance Right For You?
There are many factors to consider before purchasing a divorce insurance policy. Some critics have pointed out the fact that the divorce insurance policies as sold by Safeguard Guaranty Corporation aren’t a good deal, since you don’t get a lot of return for your investment. They argue that you’d be better off taking that money and sticking it in a savings account.
Another point to consider is that the company selling the policies may be unable to meet its contractual obligations. In that case, policyholders could be stuck with a worthless policy.
And finally, there’s always the risk that you won’t end up filing for divorce, so you may be wasting money on an insurance policy you’ll never need.
Speak With a Palm Harbor Divorce Attorney Before Filing For Divorce
If you’ve decided the differences between you and your spouse are irreconcilable, you’re probably wondering, are there any divorce lawyers near me who can help?
Divorce attorney Paul H. Bowen is here for you. Paul has successfully represented people in Palm Harbor, Tarpon Springs, East Lake, Dunedin, Clearwater, and other West Tampa Bay communities in family law matters, filing for divorce, alimony, child support, custody and visitation, and the preservation of marital assets for over 30 years.
Put divorce attorney Paul H. Bowen’s vast experience and legal knowledge to work for you. Contact the law office of Paul H. Bowen online or call us at (727) 773-1554 to schedule a free initial consultation to discuss your family law case.