From the "Why Didn't I Think of That?" file: Divorce Insurance
September 14, 2006 Business News(PRLEAP.COM) Apex, NC - If John Logan has his way, sometime in the very near future, people across the globe will be able to purchase insurance coverage against the potential financial devastation often caused by divorce.
Logan, Chairman & CEO of SafeGuard Guaranty Corporation, a Nevis based insurance company with operational headquarters near Research Triangle Park in North Carolina, announced plans to offer divorce insurance internationally sometime in early 2007.
“We’re on the tail end of funding, but everything else is ready.” said Logan, “I’m guessing six months or so depending on how fast we can come to terms with a few investors.”
The coverage will be geared toward rewarding people who have a long and successful marriage, but will also compensate those unfortunate enough to fall into the statistic of the 50% or so marriages that eventually fail every year. Today, the odds that your marriage may end in divorce are very real, regardless of your socio-economic status.
“Times have changed.” said Logan. “Divorce rates here in the US haven’t changed much in 30 years, but the financial situation of the typical family has changed, and not for the better. Add the average cost of $15,000 to $30,000 in legal fees for divorce here in the US and that’s a recipe for financial disaster. Most people overlook that. And it’s worse elsewhere.”
In a recent publication of the Journal of Sociology, details of a study make the point clear. Jay Zagorsky, an Ohio State University sociologist, followed baby boomers from youth to their 40s through the National Longitudinal Survey of Youth. Zagorsky found that on average, by their mid-40s, married individuals will have over 75% more wealth per person than singles will, but the divorced are worse off, losing an average of 77% of their net worth. More research points to the fact that divorce is the number one reason for bankruptcy and poverty among single mothers worldwide.
“We will provide a financial safety net for the often devastating financial consequences of a failed marriage, but the biggest payout is for those policyholders that have a long and successful marriage.” said Logan. “We’re providing significant monetary incentive for our policyholders to stay married, but we know divorce rates worldwide aren’t changing for the better anytime soon. If we can prevent even one child from spending a life in poverty, all the monetary benefits pale in comparison.”
Whether or not SafeGuard’s offering will meet the public’s demand remains to be seen, but there’s little doubt the market is there with an estimated 10 million marriages expected to end in divorce by 2015 in the US alone. Logan estimates the market at nearly $200 billion worldwide.
“This is big money. I’m sure once the industry digests how we’re making this work, some major players will surely join in, but in the short term we’ll make our current investors very, very happy. And there’s still room for a few more,” he said.
John Logan, CEO
SafeGuard Guaranty Corporation