The Rite of Marriage -
Priest says: (Groom's name), do you take (bride's name) for your lawful wife, to have and to hold, from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, until death do you part?
Groom says: I do.
Priest says: (Bride's name), do you take (groom's name) for your lawful husband, to have and to hold, from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, until death do you part?
Bride says: I do.
The rites of marriage create an everlasting bond between the bride and groom. But how many couples actually have a marriage that lasts until death? Unfortunately, many couples end up getting divorced due to various reasons. Statistics reveal that almost 40% marriages in the United States end up in divorce. This is sad, but true. The process not only causes emotional disturbance, but brings along various expenses like the cost of lawyers, witnesses, forensic accounts, and investigators. These expenses definitely add to the misery. Getting divorced can be quite expensive and many couples face financial crises during such proceedings. Also, couples going through a divorce may suffer from financial crunch after it is formalized. This is a serious problem, and is therefore addressed by insurance providers in the form of a new concept known as "Divorce Insurance".
What is Divorce Insurance?
Like other insurance products, this product provides coverage in case of a divorce. It is a contract between the insurer and the insured, wherein the insurer is liable to pay the coverage amount to the insured in the event of a divorce, in exchange of which, the insured promises to pay a particular amount as premium towards the cover. People who want to secure themselves financially in the event of divorce can opt for it. However, getting this insurance is not that simple. If it were, people who have decided to get divorced in the near future would take the cover and enjoy its benefits. To curb this issue, insurance companies have found a way out by fixing a maturity period for a policy, which is discussed later in this article.
How Does this Policy Work?
A divorce insurance policy is sold as units. Each unit costs around $16 per month, which provides a cover of $1,250. If a person buys ten such units, the total coverage amount will be $12,500 for which, the premium charged would be $160 per month. For every year passing by without a claim, the company adds $250 per unit to the coverage amount. In this way, the company keeps on increasing the total coverage amount in case a claim is not raised. When a policy holder makes a claim to the insurance company, it settles the claim by handing over the total sum assured to the insured person. However, as mentioned before, the insured has to first fulfill a maturity period after which a claim can be raised. If the person gets divorced before the maturity period, he cannot claim the coverage amount.
How Long is the Maturity Period?
Maturity period of this policy is 48 months from the effective date. This means, the policy holder cannot claim the amount for 4 years from the date of issuance of the policy. Maturity period is fixed so that people do not buy policies simply to get a claim settlement. Only genuine people who are in need of such a policy buy it for security.
Are there any Riders Available?
Additional riders are available which can be bought by paying extra premium. Riders include the option of reducing the maturity period to three years, and getting back the premium paid in case divorce is in the picture before the maturity period.
Why Should You Buy this Policy?
As we know, divorce involves a lot of expenditure. Getting a policy will provide you financial security. You will not have to worry about the expenses incurred during the complete process. Also, you will be financially sound to buy or rent a new house for yourself after the divorce, take care of your children's needs, and concentrate on other matters rather than worrying about your finances.
Are there any Disadvantages?
A divorce insurance policy has some downsides. In case a divorce does not take place, all the money spent as premium will be lost. But this should not be considered as a loss because in return of the premium, the person gets an assurance by the company of paying the coverage amount in case a divorce is filed. Another disadvantage is that the coverage amount is divided among the spouses in the event of a divorce. Furthermore, these policies are not covered under state funds that would back them up in case, the insurer goes bankrupt.
SafeGuard Guaranty Corp., a North Carolina based company, was the first one to launch a product of this kind in the market. The company came up with such a product to support people financially after a divorce. The entire process can be costly, but one can keep the divorce costs down by keeping certain things in mind. This product is a good option, but one has to decide for himself the actual need of this kind of insurance.
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