A company called WedLock is offering casualty insurance at a rate of $15.99 per unit of insurance—to be paid upon proof of your divorce. Fifty percent will be paid out upon proof of legal separation and the other 50% is paid out when they get your divorce decree. For each unit purchased, you’ll receive a payout of $1,250 if you divorce your partner. You can purchase up to $250,000 and after the maturity period, you’ll receive an additional $250 annually to be paid on each unit. The maturity period is 48 months, but by purchasing an additional product called the Accelerated Maturity Rider, you can decrease this to 36 months.
Can I start by saying how crazy the idea of this is? I thought a prenup was a difficult issue to bring up with your future spouse, but this one is even worse. How would you broach this with someone? Maybe say I’m not sure that we’re going to make it, honey, so I thought we’d buy insurance on our marriage just in case. Kind of the same as prenups, it sends your partner a strong message: I don’t trust you.
Now, playing devil’s advocate, no one can predict divorce. What happens when you think that your marriage is fine, only to find out that your spouse has been having an affair and wants to leave you for them? Maybe you are a stay-at-home parent and have no source of income other than your spouse. What then? Divorce insurance would sure come in handy for your impending legal fees and the care of your children. This scenario is very common and studies have shown that for the first 4 years, female divorcees are worse off financially, but men are 20% better off than before. Aside from the stereotypical response that women are high maintenance and cost too much, men also do better financially because they are still paid more than women.
So what happens if you actually make your marriage work? You get nothing. Your policy will continue to grow by $250 annually after it matures, and as long as you continue to pay your premiums, your policy will remain in effect. If you don’t ever show proof of divorce or you discontinue payment, then you just get to feel like a fool for paying $1900 every year for those 10 units of insurance that you didn’t need.