Couple buying insurance.jpgThe Washington Post reported October 17, 2010 on the recent availability of Divorce Insurance. It is presented, somewhat, as an alternative or reaction to prenuptial agreements.

WedLock Divorce Insurance is an annually renewable policy of casualty insurance that pays out a lump sum of cash if a marriage ends in divorce. It is sold in payoff units of $1,250. Thus, if a 10-unit policy is chosen, the payoff on divorce would be $12,500 ($1,250 x 10).

The premium for each unit is $15.99 per month. The website points out that that’s less than 53 cents a day per unit, perhaps a tenth of the price of a cup of premium coffee.

However, there is an initial four-year Waiting Period during which divorces are not covered. So, premiums of at least $767.52 (48 months x $15.99 per month) would have to be paid get the $1,250.00 payoff for a divorce judgment entered after that period. Good news, though! For every 12 months of premiums, or $191.88 (12 x $15.99), paid after the Waiting Period, each unit does increases in value by $250.00.

For an additional payment, one can purchase the Accelerated Maturity Rider, reducing the Waiting Period to three years. A Return of Premium Rider is also available to recover premium payments made if the divorce is entered before the end of the Waiting Period.

The website provides a Divorce Probability Calculator, predicting your likelihood of a divorce, within a 13% margin of error, by answering 20 simple questions.

WedLock Divorce Insurance can be purchased by a spouse at any time with or without the knowledge or consent of the other spouse. Moreover, anybody can buy the policy: parents can bet on the success of a child’s marriage.

The website points out that since there is no accrued or accumulated cash value to the policy before the divorce is finalized, there is no marital asset to divide. (Query: would use of marital funds to pay the premiums constitute waste or a “non-marital”expenditure?).

To quote Yakov Smirnoff, “America, what a country!”