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Forget The Pre-Nup, Buy Divorce Insurance Instead

POSTED: 6:24 pm EDT September 18, 2006

 

RALEIGH, N.C. -- Nearly half the marriages in the United States ends in divorce, so one local entrepreneur now wants to offer divorce insurance.

Eileen McElroy recently started shopping for the perfect wedding gown.

"It's fun because you never know when you put that dress on if it's going to be the one," McElroy said.

She is sure her fiancée is the one, but the vow "til death do us part" doesn't mean all that much to one in five Americans who get divorced.

McElroy is sure she would not purchase divorce insurance.

"No, never!" McElroy said. "I really don't think I ever would because it almost would put a stain in my mind that I would need it."

Local entrepreneur John Logan said he spent $35,000 on his own divorce.

"Setting up separate households, it's a recipe for disaster -- financial disaster," Logan said. "Nowadays, according to research I've been able to find, almost half the families that suffer through divorce spend at least some portion of time at poverty level."

Logan went into the insurance business five years ago and started exploring how to help others financially survive a break-up and came up with divorce insurance.

"We provide a means for them to pay off their attorneys and start a new life for all intents and purpose," Logan said.

So who reaps the rewards? "The biggest pay off is for folks who actually stay married for 25 years," Logan said.

In that way, Logan hopes to make a positive impact.

He knows with a divorce rate near 50 percent, claims will be high, but he is sure the math works.

"Most of the folks that pay into the premium will pay into a reserve that in turn has investment value and that helps to shore up the investment for folks who file a claim," Logan said.

Logan's company, Safeguard, is finalizing its investment group. He couldn't go into specifics just yet on the premiums, but he said the base price will be affordable for anyone. He plans to offer divorce insurance internationally in 2008.