Insurance policies help keep people on a sound financial footing when all sorts of catastrophes strike – floods, death of a spouse, even job loss. One insurance maverick wants to add another catastrophe to the list—divorce.
“Divorce creates a financial burden on both spouses and families, especially women, many of whom find themselves falling below the poverty line,” says John Logan, chairman and CEO of SafeGuard Guaranty Corp. in Apex, N.C., and the company that offers WedLock divorce insurance, who says he will have a divorce insurance policy on the market within several months.
The benefits from divorce insurance would cover anything involved in the divorce proceedings ranging from legal fees to starting a new household.
“All we do is write the check, we don’t tell them how to spend it,” says Logan.
Logan’s policy would be sold as a surplus line product, which means that these products generally insure risks not covered by standard lines of insurance.
Surplus line products are specialty insurances provided by insurance companies such as Lloyd’s of London and Chubb Group of Insurance Companies that will cover just about anything at a cost.
Logan’s product would be offered to anyone willing to pay for it, including those with several divorces under their belt, but there’s a catch. The policy has a 48-month elimination period where the policyholder cannot file a claim, but would still be responsible for paying the premiums.
“It would work like a term policy in that it would pay once the divorce is finalized and only then,” explains Logan.
Logan says divorce insurance also shares similarities with property and casualty policies.