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Is Divorce Insurance Worth the Cost?

Fifty percent of marriages are unfortunately ending in divorce. Divorce is not only emotionally taxing, but it is also expensive. Some people are choosing to take out divorce insurance to avoid a potential financial disaster in the event of a divorce. While this can be a pricey form of insurance, many individuals are considering this new form of protection. But, is it worth the actual cost?

Divorce Insurance Has Its Advantages and Disadvantages

Before deciding whether divorce insurance is right for you, it's important to consider the advantages and disadvantages that this protection offers. Divorce insurance can help provide financial security. After a divorce, you can use the benefits to help continue caring for your children. It can also allow you to focus on other aspects of your life, instead of worrying about finances.

Divorce insurance also has disadvantages. While it may seem at first that this type of coverage is affordable, it can actually be very costly. Coverage is purchased in units. A unit of coverage costs around $16 a month for $1,250 in coverage. If 10 units are purchased, your initial coverage would be $12,500 and you’d be paying $15.99 per month for each of those units. Additionally, the company adds $250 in coverage for each unit each year.

These policies aren't effective until after 48 months, so couples need to stay married for at least 4 years before using any benefits. This type of insurance bill can add up quickly and in many cases, may never even be used.

Consider Your Own Beliefs and Needs Before Purchasing Divorce Insurance

You should think carefully before deciding to purchase divorce insurance. It's important to talk this purchase through with your spouse to decide if it's a good fit for your family. Before deciding to purchase this form of insurance, it's important to make sure that it fits into your current financial picture. You don't want to fall into a debt struggle trying to make your divorce insurance payments.

Consult with a Nonprofit Credit Counselor

If you've experienced extreme debt problems due to a divorce or if you're currently going through the stressful process of divorce, you may benefit from consulting with a nonprofit consumer credit counseling company. If you are just starting your marriage and you need guidance on how to create financial harmony in the home, Advantage CCS offers advice regarding debt management and responsible use of credit. It can be beneficial to work with an experienced budget counselor to get your finances back on track. While divorce can be a stressful and costly process, you don't have to deal with the hardships alone. Contact a credit counselor to begin taking advantage of money-saving advice.