To be honest, I had never even heard about this type of insurance and I’m not sure that I grasp the concept entirely. I found one US company that is planning to start operations in Canada in the near future.
What Is The Concept?
Quite simply, it is to protect the couple in the same way as other casualty insurance policies do. Couples can pay a premium upon getting married and will receive a payment if they end up getting divorced at some point in the future. This payment would help the couple
Will This Increase The Already Sky-High Divorce Rate?
Safeguard, the company pitching this product says that this product also offers a payout after 25 years of being happily married and thus does not offer greater incentive to get divorced. I would imagine that the payout remains much smaller than the future value of all payments that were made since that is not what the policy is actually trying to protect against.
Better Or Worse Than A Pre-Nup?
I guess in some ways, it can be perceived as a similar way to protect yourself as a Pre-Nup but I would still imagine that it can become a bit uncomfortable to start preparing for a divorce before even getting married. A few websites held surveys regarding their visitors interest in such an insurance, here are the results:
If the company plans to pay both in the case of a divorce and a long and happy wedding, it seems like this might be part of the too good to be true category. I guess I wouldn’t also love the idea of seeing a couple stay married in order to get their financial payout, it doesn’t quite seem like the right motivation:)
How Would Rates/Payouts Be Determined?
Life insurance premiums are generally determined by one’s health but it seems much trickier to determine if a couple will end up getting divorced given everything involved. Some places (such as Quebec) and countries have divorce rates of 50% or more, would such an insurance be more expensive to purchase in those places?
What Are Your Thoughts On Marriage Insurance?