Not many people would consider a divorce an inspiring event. Yet that was the inspiration behind John Logan’s innovative new company, WedLock. Logan, 53, came up with the idea for divorce insurance after going through his own costly split. “I got divorced several years ago and it was world class ugly,” he said.
Critics argue that insurance companies shy away from offering such insurance because of its appearance as an incentive to divorce – what some refer to as a ‘moral hazard’. But Logan counters that it is less of a hazard and more of a reality. “The truth is the odds of divorce are higher than most of the other things we commonly insure ourselves against,” he said.
Another criticism of divorce insurance is the potentially high premiums. Yet Logan has found a way to keep it affordable, offering insurance coverage for as little as $15.99 per month. The terms require that the insured pay for at least four years before filing a claim.
If you would be afraid to bring up the idea of divorce insurance with your current or future spouse, you’re likely not alone. Logan has anticipated this, working in several features designed to protect privacy, if you want it. “These are individual policies. A wife could buy one for herself without her husband knowing about it,” he said.
However, secrecy is not the goal. “We’d rather have a scenario where a man and woman buy a policy for each other, where it’s part of a prenup,” Logan said.
Although his divorce was traumatic enough to spur his business venture, Logan, who is engaged, appears to have recovered. Yet he has learned his lesson, and plans to buy a divorce insurance policy. “And I’ll be buying an identical policy for my spouse,” he said.
Source: Chicago Tribune, “A dalliance with divorce insurance“, Wendy Donahue, 26 August 2010