• 19
  • August
    2010

For those who thought a prenuptial agreement was the only sure form of asset protection in the event of a divorce, guess again. There is now another method of helping ensure that your future financial interests are protected if you and your spouse terminate your marriage.

What is this groundbreaking new method of asset protection?

Thanks to SafeGuard Guaranty Corp., you or your spouse may now purchase a form of divorce insurance called "WedLock." 

WedLock, billed as the world's first divorce insurance, provides the insured with financial assistance (i.e., cash) to pay for the various expenses associated with a divorce, including legal fees, a new home, etc.

How does it work?

You or your spouse purchase "units of protection." The purchase price for one unit of protection is $15.99 per month, and the unit provides approximately $1,250 worth of coverage. Accordingly, if you buy ten units of protection, you will receive exactly $12,500 worth of coverage. In addition, the company will add an extra $250 in coverage for each unit purchased on an annual basis (assuming you and your spouse stay together).

However, the divorce insurance does not officially mature (i.e., pay out to the insured) until four years after the date of execution. (This can be lowered to three years with the purchase of an additional insurance rider.)

If your policy has matured and you divorce your significant other, you will then need to provide SafeGuard with a copy of the final divorce decree. Once this is completed, you will theoretically receive the policy proceeds. 

It is worth noting that WedLock policies are underwritten by Prime Insurance Company, but are not covered by state guaranty funds that honor the policy in the event the provider files for bankruptcy. However, the CEO of SafeGuard, John A. Logan, expects this to change relatively soon.

This is certain to cause a stir in the legal community, stay tuned for further developments ...

Related Resources:
  
• Divorce Insurance (Yes, Divorce Insurance) (The New York Times)