• 19
  • August
    2010

It is common knowledge that nearly half of the marriages in the United States end in divorce. Undoubtedly, a significant percentage of these divorces are "contested divorces," meaning they involve lengthy and potentially hostile legal proceedings that wind up costing each of the litigants a significant amount of money.

Interestingly enough, there is now a new product being marketed that can supposedly help mitigate these legal expenses, as well as cover other costs related to the end of a marriage.

A North Carolina based insurance company, SafeGuard Guaranty Corp., is now offering a form of divorce insurance called "WedLock." 

What is it?

Billed as the world's first divorce insurance, WedLock is designed to provide insured parties with financial assistance (i.e., cash payments) to cover the various expenses incurred during a contested divorce, including legal fees.

How does WedLock work?

Either you or your spouse has the option of purchasing "units of protection." The purchase price for one unit of protection is $15.99 per month. This one unit of protection provides approximately $1,250 worth of coverage. Accordingly, if you buy ten units of protection, you will receive exactly $12,500 worth of coverage.

Assuming you and your spouse stay together, SafeGuard adds an extra $250 in coverage for each unit purchased on an annual basis

When does it pay out?

A potential drawback of the WedLock policy is that it does not mature (i.e., pay out to the insured) until 48 months after the date of execution. However, this can be lowered to 36 months with the purchase of an insurance rider.

If the policy has matured and I am divorced, how do I recover the policy benefits?

If the policy has matured and your divorce is officially complete, you will then need to provide SafeGuard with a copy of the final divorce decree. In theory, once this is completed, you would receive the policy benefits. 

While this is an interesting concept, it is also certain to generate controversy in both legal and non-legal circles.

Stay tuned for further developments ...

Related Resources:
  
• Divorce Insurance (Yes, Divorce Insurance) (The New York Times)