A company is now offering divorce insurance as protection against your marriage falling apart. While I don’t think this product can legally be sold in Massachusetts, it is a new concept that is worthy of discussion. Perhaps, someday, it will be legal to buy this in this state.
In Massachusetts, all insurance must be licensed. I looked at the Division of Insurance web site and didn’t find this listed. As a result, I think that they are not licensed in Massachusetts and can’t sell this insurance. I suggest that Massachusetts citizens check with the Division of Insurance before looking at this product.
Divorce insurance is being sold by SafeGuard Guaranty Corp., an insurance company based in North Carolina. The product is called Wedlock Divorce Insurance. The website does not indicate that they are limited to sales in certain states.
The insurance pays a lump sum in the event a policy holder gets divorced. The amount of the payment is based on the policy purchased. The amount paid is not related to court orders for support or property division. The coverage is sold in units of $1,250.00 based on a monthly premium of $15.99. As an example, assume that a person purchased 10 units at a monthly cost of $159.90. If a divorce occurs, the company will pay the insured $12,500.00. There is a four year exclusion period so if the divorce occurs within four years, nothing is paid.
The biggest problem I see is that a Massachusetts court is likely to view the insurance policy as another asset subject to division. This would defeat the purpose of the insurance. Of course, insurance is based on the concept that the insurance company makes more money than it pays out. If you can save the money each month, you are better off.
I think this is an interesting idea but not a product than can benefit most people in this state if it can be lawfully purchased.