What Is Divorce Insurance Coverage?

Can you get an insurance policy to cover the cost of ending a marriage?

Young Couple Sitting Apart From Each Other in a Living Room, Apparently in an Argument
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According to the American Psychological Association (APA), more than 90% of people will get married by age 50, but 40% to 50% of them in the U.S. will get divorced. It’s no wonder, then, that people seek divorce insurance to help provide a safety net if the worst happens. If you’re looking for divorce insurance, you may have a hard time finding exactly what you need, but there are some insurance products that can help provide reimbursement of divorce costs, including legal fees. 

Does Divorce Insurance Exist?

There is no product available today known as divorce insurance. One was briefly available in 2010, but the coverage was discontinued. The concept is similar to that of most other insurance policies: If you suffer an unforeseeable financial loss, you expect to receive compensation from your insurer to help with recovery from the impact. There are related insurance products you can consider that can cover some of the associated costs of divorcing. 

 How Is a ‘Prenup’ Different?

A prenuptial agreement, also referred to as a “prenup” or antenuptial agreement, is a legal contract drawn up prior to marriage between two people to ensure that if the marriage dissolves, certain conditions will be met. 

Both a prenup and insurance purchased to address divorce expenses become effective at the point of a marriage’s dissolution, but the similarity ends there because each one’s purpose and function are different. 

The prenup is established prior to marriage to outline what may happen to existing assets in the event of a divorce; with divorce insurance, the contract instead would be between an insurance company and one of the spouses. In it, the insurer would agree to pay a set benefit upon the policyholder’s divorce, in return for premiums paid. 

Although the prenuptial agreement is a contract, it may still be contested or invalidated if it is proven to be signed under duress or other circumstances in which judgment was impaired, or manipulation is found to be involved. 

What is a Marriage Settlement?

Prenups and insurance established to pay legal expenses also differ from something called a marriage settlement. This occurs as the marriage is concluded, rather than before marriage (although the conditions of a marriage settlement may be outlined in the prenuptial agreement). Marriage settlements are written agreements between couples that outline the conditions of the divorce, including the division of assets, property rights, the custody of children, visitation rights, and spousal or child support. 

What Would Divorce Insurance Cover?

Understanding what an ideal divorce insurance product would cover can lead you to existing insurance coverage that may help. Each divorce situation is unique, but here are some common factors that divorce insurance could cover:

How Much Does Divorce Cost?

When you think about paying for a divorce, one major cost to consider is your attorney. The average total cost of divorce is $12,900, and the cost of a divorce attorney can run between $100 and more than $400 an hour, according to survey data provided in January 2020 by Martindale-Nolo Research. While these numbers give you an idea of basic fees, things can get far more complicated and expensive if there are disputes or the process becomes drawn out. 

Although there is no one “divorce insurance policy,” there are insurance services that can help cover some of the costs. 

Insurance for Divorce Costs

Finding security through various insurance products when your marriage is having trouble will not replace what you lose, but it can help protect your health and financial well-being more than if you had no insurance coverage at all. Consider these insurance products or legal services for help with divorce’s associated costs, including legal fees:

  • Health insurance or employee benefits: Divorce can trigger a lot of complex emotions and stress, so getting support is important. Look into health insurance coverage through your employer, or possibly from the Obamacare insurance marketplace. Employer-sponsored coverage sometimes includes Employee Assistance Programs (EAPs) with services like psychological support for yourself or your children.
  • Legal insurance: There are legal insurance policies that may be able to provide limited coverage for uncontested divorce legal advice over the phone, and in some cases legal representation or support with child custody issues. Be sure to ask how each policy covers family law, because some exclude contested divorce or family law issues.
  • Legal fee discount plans: There are legal discount plans for lawyer networks that you can sign up for that provide assistance and discounted rates on simple-divorce legal fees and may even include free consultations. Look into these before taking on full-priced counsel.

Mediation or a collaborative divorce will not only save you a great deal of psychological distress, and be easier on family members, but the cost is significantly less than a contested divorce, according to a 2019 reader survey by legal research firm NOLO. 

 Mediation or collaborative divorce fees range from an average $970 to less than $500, versus the average cost of $12,900 for a contested divorce.

Divorce insurance does not exist specifically, but there are many services available that can help with different aspects of ending a marriage, like legal insurance, legal discount plans, or counseling that may be covered by your health insurance. Legal insurance is a good option to consider at a very low monthly price that will allow you access to guidance if you decide to divorce. 

Key Takeaways

  • Divorce insurance doesn’t exist, but other insurance is available to cover some costs of dissolving your marriage
  • Divorce insurance is not the same thing as a prenup or marriage settlement
  • The cost of mediation is significantly less than the bill for a contested divorce
  • The better prepared you are for your divorce, the more likely you are to save money on attorney fees and trial costs

Article Sources

  1. American Psychological Association. "Marriage and Divorce." Accessed July 20, 2020.

  2. NOLO. "How Much Will My Divorce Cost and How Long Will It Take?" Accessed July 20, 2020.