Divorce Insurance?? Let’s Do the Math….

by Petra Maxwell on November 4, 2010

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A company called WedLock now offers divorce insurance. That’s right, divorce insurance. If you divorce after a thirty-six month waiting period, the policy pays you a benefit, meant to cover the cost of your divorce.  What’s next, a divorce app?

Let’s look at the cost of this new concept.  A policy is not cheap. Every $1250 of coverage costs $16 per month. The average litigated divorce costs upwards of $30,000. A $30,000 benefit would run you $384 a month – and is probably close to what you pay for your car payment. Is it even cost effective? At a yearly rate of $4608, eight years of marriage (the median point length of marriages that experience divorce) this $30,000 benefit will actually cost you $36,864 in premiums. More than a divorce itself and much, much more than a mediated divorce would cost.

Money concerns aside, is divorce insurance any different than a prenup? To some couples it might be. A prenup is something you do once, while thinking, “we’ll never need this, but just in case….” Divorce insurance is something you have to pay every month and keep in force, so it keeps the possibility of divorce as an active thought in your mind. Each month you have to mentally reevaluate if you might need the policy and if you ask yourself something like that often enough, the answer is bound to be yes at some point.

Want some effective divorce insurance? Try premarital counseling. One study found that couples who went to premarital counseling had marriages that were thirty percent stronger than couples who didn’t. Counseling taught them communication and conflict resolution skills. What if you’re already married? Counseling during marriage has been shown to create a feeling of significant improvement in sixty-five percent of the couples who attend. If you are considering divorce, mediation is the most cost effective and satisfactory way to resolve the issues in front of you. No insurance needed.

{ 2 comments… read them below or add one }

John Logan November 4, 2010 at 11:41 pm


Here’s the problem I have with your math. It’s wrong.

If you had taken the time to better reseach the product you would know that the policy value increases annually by $250 per unit once the waiting period is over but the premium stays the same. In this case, that $30,000 of INITIAL COVERAGE, would be worth $54,000 after 8 years…far more than your predicted expense for the divorce.

There is no situation where WedLock Divorce Insurance policy holders would get back less than they’ve paid in.

In addition, WedLock Divorce Insurance policies are now being incorporated into prenuptial agreements as a mechanism to pay off expected legal (and other) expenses. There is no “monthly reevaluation” since the payments are automatically deducted from a debit or credit card without any human interaction.

While we wholeheartedly agree that both pre-marital and marital counseling can be beneficial, there is no guarantee that any amount of counseling will (or should) keep a damaged marriage together. In that event we provide a financial safety net that could help keep the 44% of American families that currently go below the poverty line after divorce from going bankrupt.

We appreciate feedback on our product, both pro and con, but we try very hard to ensure that misinformation – like the wrong calculations – are not perpetuated.

John Logan
SafeGuard Guaranty Corporation


Petra Maxwell November 8, 2010 at 5:35 am

Dear Mr. Logan,

Thanks very much for commenting on my recent post in which I questioned the need for divorce insurance. I appreciate you clarifying the math and explaining the appreciated value of such a policy over time.

Perhaps it’s my own fault for not sharpening the point of my argument. In fact, my concern with divorce insurance is, quite simply, that a couple entering a union together shouldn’t begin their relationship by hedging their bets. It’s my opinion that it would be far better for couples to engage in pre-partnership counseling – which, studies show, yields more solid and long lasting unions – than to purchase expensive divorce insurance.

Moreover, were the marital relationship to end in the future, mediation seems to me to be a more cost-effective way to settle the dissolution. Mediation costs a fraction of the expense of a litigated divorce – sometimes as little as a tenth of the cost. But, of course, I admit to being a bit biased.

Petra Maxwell, J.D.
MediationLIne, LLC


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