For better or worse: Insurance for divorce and cold feet

Mary Lou Jay

Although the romantics among us would like to think that no one goes into a marriage planning a divorce, the fact is that today more and more people are taking steps to protect themselves financially just in case the wedding vows don't last.

A recent survey by the American Academy of Matrimonial Lawyers showed that 73 percent of its members reported an increase in the number of prenuptial agreements handled by their practices during the past five years. Now, one insurance company has begun offering divorce insurance designed to provide financial assistance in the event of a split.

Safeguard Guaranty Corp.'s Wedlock Divorce Insurance provides a lump-sum payment of cash when a marriage ends in divorce. The insurance can be purchased by either spouse (or by parents or other parties who don't give the union a chance). Coverage is sold in units of $1,250, with a maximum of $250,000 in coverage. Costs start at $16 per unit.

An unhappy spouse can't buy coverage one day and file the divorce papers the next, however. There's a four-year waiting period before coverage kicks in (an available rider cuts that to three years). Another rider allows a return of premiums already paid if the couple divorces before the end of the waiting period.

Divorce can be financially devastating. According to, the cost of a divorce now averages between $10,000 and $20,000. In addition to legal fees, divorcing couples will have to cover costs for setting up separate households (security deposits, furnishings, moving costs).

What if a prospective couple breaks up before the wedding? The person paying for the event could lose thousands in deposits. Although several insurers offer some form of wedding event insurance (usually property and liability coverage), Fireman's Fund Insurance Co. has taken it a step further with a rider for coverage of a last-minute change of heart by the bride or the groom. The payout is limited, and the policy must be purchased by the person who is paying the bills. It cannot be purchased by the bride or the groom.

So should you be buying divorce insurance along with wedding invitations? We frequently hear that 50 percent of all U.S. marriages end in divorce, but it's actually difficult to get good information on the probability of divorce. The federal Centers for Disease Control and Prevention's 2006-2008 National Survey of Family Growth reports that after five years of marriage, 19 percent of men and 20 percent of women are separated, are divorced or have had their marriage annulled. Those numbers rise to 27 percent for men and 29 percent for women after 10 years.

As with any insurance, if you decide to buy coverage for divorce or cold feet, make sure you fully understand the terms of the policy, including any waiting periods and exclusions. There's enough tension involved when a couple splits -- you don't need any further unhappy surprises when you make an insurance claim.