- By Misty Harris, Postmedia News
Because the “for poorer” part of marriage vows often comes with a nasty split, couples have a new type of contract to consider: divorce insurance.
A scholar at one of Canada’s leading law schools predicts the controversial insurance, recently unveiled in the U.S., will come to be “offered widely” in this country, where nearly two in five marriages — 38 per cent — are dissolved before the 30th wedding anniversary.
Given such odds, the insurance itself may be less surprising than the time it took someone to come up with it.
“That old maxim that when you get divorced, you lose half of everything? That’s wishful thinking,” says John Logan, whose North Carolina-based company is behind Wedlock divorce insurance. “You might give your spouse half your net worth, but you’re going to give another quarter to expenses and legal fees.”
Divorce insurance is sold in units of protection, with each unit costing about $16 per month for $1,250 in coverage. Wedlock adds $250 in coverage to each unit every year after the mandatory waiting period of three to four years — a caveat in place to prevent imminently separated couples from exploiting the product.
“It’s not cheap, but look at the risk we’re taking,” says Logan, who lost his house and effectively went broke during his own divorce a decade ago. “We’re not home insurance, where the chances are one in 300 that you file a claim; our odds are one in three.”
James Morton, adjunct professor at
He’s unsure, however, of how well the product will take off.
“It’s important to make sure the insurance is worth it,” says Morton. “If the matter is not contentious and the spouses are pretty well agreed, (divorce) costs should be fairly low — say, in the $5,000 range, all included. But if the matter is contested, costs can be enormous. I’ve seen cases with legal costs exceeding a million dollars.”
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