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Marriage insurance ... the next big thing?

Hearing the spiteful and snide remarks, I’m always amazed at how some couples remain married. It’s not that they have never thought of divorce, they probably think about it daily, the glue to keeping these unions of unhappiness together is the power of the mighty dollar. It’s a fact of NZ marital life, separate and your dollar you once owned, now becomes 50 cents. In losing one problem, you gain another. You get to keep the house …. only now you have twice the mortgage.

Divorce is never pretty, and there always seems to be one party that comes out the other side better off. So you split the assets 50/50 but ultimately the winner is that person whom is able to generate more wealth due to their profession or other circumstance. The loser is the person who opted to stay at home and raise the children. Let’s face it, once you’re out the professional workforce for an extended period of time, it’s very hard to make-up the lost ground. I can’t say I’ve ever seen the stay at home dad who sacrificed his cricket career to be a house husband for his career orientated lawyer wife, make the black-caps after his divorce. His financial security was as strong as his marriage, the forgone sporting opportunity, nothing but a photo on the mantel piece.

That said, only an insurance actuary can put aside all emotions and quantify the potential loss that will eventuate from a divorce. Wedlockdivorceinsurance.com is now offering couples the ability to buy insurance in the event their marriage lands up in divorce. It costs about $20 a month for every $1,500 of cover. To discourage people from signing up just prior to their divorce, policyholders must have the policy for at least 4 years. The policy adds a premium of $300 per unit for every year the marriage survives beyond four. So if a policyholder buys $30,000 cover and gets divorced after 10 years, he or she would have handed over $12,000 and would receive a payout of $31,800. It's probably not worth getting divorced for, but the payout may salvage some pride, or provide a war chest for the ensuing litigation.

Just in case you’re wondering (which is not a good sign), I don’t believe the cover is available in New Zealand... yet!

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