Wednesday, August 8, 2007

Divorce insurance?

Concurring Opinions writes about the idea here. The post has this to say about divorce insurance:

But when I talked to Logan, he preferred to call the product to be offered a "hybrid insurance/investment product." The idea is that individuals would buy the right to a payout, in 25 years, of a fixed sum, and in turn promise to pay premiums priced based solely on the total face value of the instrument. The instrument – let's call it an annuity for ease of reference – has a contingency: if its owner gets divorced, the annuity pays out immediately, at a rate to be calculated based on the time since purchase and the premium rate. That is, the longer you stay in the marriage, and the closer you are to the end of the 25-year annuity, the more money you will get paid on divorce. The product does not seem to intend to graduate premiums at all based on the risks of divorce, or the "why". It is a fairly simple investment vehicle. The only other bell I learned about was their plan to permit individuals to recapture premiums at any time, so long as they purchase an initial premium rider, which is a bit of departure from ordinary insurance practice.
When I finished that paragraph, I was thinking what a prenuptial agreement? You folks who read my posts on them but you have a reason for never quite getting around to calling the office for an appointment, right? I am thinking the same thing about this investment/insurance product. So did the writer on Concurring Opinions - in the next paragraph.

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