Divorce Insurance – Should you Insure your Marriage?

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Is there such a thing as divorce insurance? Most of us are familiar with insuring the important aspects of our lives. Many of us even go the extra mile and take out life insurance policies in the hopes that our loved ones will be cared for if we die too soon. Now, a few companies globally are offering divorce insurance to couples.

And why not? According to statistics from First Marriage Dissolution, Divorce, and Remarriage: United States by Matthew D. Bramlett, Ph.D., and William D. Mosher, Ph.D., from the Division of Vital Statistics, divorce is a real possibility! While they dispute that divorce rates are climbing over the 50% mark, they compile a wealth of data that reveals the probability of divorce based on factors like age at marriage, annual income, family history, and other key considerations.

Insurance companies have taken note, using calculators to help couples assess their risk factors. These tools can help develop an insurance policy designed to reduce the financial burden of divorce.

Should You Consider Divorce Insurance?

Divorce brings a host of unexpected financial challenges that can quickly undermine each individual’s financial stability. Couples who once had perfect credit and could finance extravagant purchases like a yacht may suddenly struggle to afford a modest car like a Kia Rio after their marital status changes. And divorce is expensive. A simple divorce can cost more than a thousand dollars, but when children and financial assets are involved, the cost can skyrocket to tens of thousands of dollars.

Divorce insurance is designed to offset the legal costs and provide a cushion for each individual to establish a new place of residence, which can range from $5,000 to $35,000 depending on location. Divorce coverage is also flexible, allowing it to be integrated with a prenuptial agreement to ensure that asset division doesn’t become tangled in the court system.

This brings up another important point about marriage. If couples planned for divorce by covering all the bases and meeting with a professional to fully understand the potential consequences, it could open a rare line of communication. Suddenly, instead of focusing solely on love, you and your spouse would be addressing critical issues like money, children, property, and asset division. Few couples discuss these matters when things are going well, but requiring these conversations before marriage might actually help prevent divorce. How so? When you discover how your partner really feels about money, property, and custody, you might realize that the two of you are on entirely different wavelengths, and marriage might not be a good idea after all.

Many couples feel awkward even talking about divorce during the early stages of marriage. The truth is, most of us wonder about the possibility of ending up as a statistic. Regardless of how well we connect with our partner, a lifetime together can take its toll on everything—including love. Couples who have been married for a long time will admit that marriage isn’t just about a white picket fence. It’s hard work on many levels, and the longer it lasts, the more difficult it can become—especially when raising a family or facing financial hardships.

It’s also interesting to consider whether planning for divorce by getting divorce insurance might actually enhance your chances of staying married. For one thing, it forces you to have essential conversations upfront. Secondly, it might alleviate some of the fears couples carry into marriage and reduce excessive codependency.

On the other hand, divorce insurance could make it easier to get divorced. With the financial burden eased, couples might feel less trapped in a marriage and more willing to end things without fearing a financial disaster. When the stakes aren’t as high, couples might be more likely to divorce, thinking they have little left to lose—except for the person themselves.

The companies offering this insurance seem to have the right idea. Consider this: your chances of being involved in a car accident in the next decade are 1 in 4, and car insurance is required by law. In comparison, your chances of getting divorced over the same period are about 1 in 3 (as of 2011), yet few people plan for this. Similarly, your chances of dying before your life insurance policy expires are 1 in 100, and around 65% of Americans have some form of life insurance. When you consider numbers like these—situations that could drastically change your life—insuring your divorce starts to make sense!

Of course, many of us are hopeless romantics. We prefer to base the success of our relationships on positive theories of love rather than analyzing them with the same scrutiny we use in other aspects of life. And that’s okay! Bringing up the idea of divorce insurance with your spouse—especially if you’re already married—isn’t a conversation you can casually have over breakfast. It could plant seeds of doubt about whether the relationship is as happy as it seems. Yet, given how many people’s lives can be drastically affected by divorce, it’s something worth considering.

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