An article by Moneycontrol.com authored by M Saraswathy, Special Correspondent, opens up a debate about Men securing their alimony costs through divorce insurance.

The article commences with a case study of a 38-year-old businessman who needs to arrange Rs 30 Lakhs alimony to avail divorce. The man has investments worth Rs 10 Lakhs and needs to organise the balance twenty more within the next few months.

Saraswathy also speaks of how divorce rates have gone up, alimony payments have risen by 35% over past five to seven years and that men must opt for a mandatory divorce insurance to be able to cough up hefty sums to their ex-wives. Also the said insurance product looks at covering the legal and child support – the burden of such expenses is once again shifted only onto the man. The author quotes:

Taking an insurance policy that pays for the divorce proceedings is a financially-prudent idea. Usually taken at the time of marriage, this insurance product will provide for all financial costs pertaining to a divorce.

We must also not miss the pointers the article highlights :

As a starter, policies with a standard cover of Rs 25 lakh or 30 lakh could be offered

These would be priced at less than Rs 15,000 per annum

If any individual seeks additional insurance, top-up plans could be offered

The amount and duration for which alimony is payable depends on how long the marriage existed

Marriages that last more than 10 years are even entitled to get a lifelong alimony

In India, there is no cap on the amount of alimony that can be sought by the wife

In case of a lump-sum settlement, the amount could go up to one-third of the husband’s net-worth

With Indian couples being far more open to the idea of a divorce than a decade ago, it is imperative that the financial costs will also be considered

Our Take

In times of Gender Equality, the onus of taking a divorce premium is only shifted to the man

Not even once the article speaks about how women must also start paying premiums #RIPGenderEquality

Clearly, such insurance schemes will promote planned divorces by many wives who feel it is an easy way to prove man has sufficient means to pay her off

No where the article takes into account the earning capacity of the wife and by default pushes the responsibility of child security only on the husband

Alimony insurance is as regressive as if fathers of brides would take insurance for their daughter’s marriage to pay dowry

It is not sure whether such a product terming to cover legal expenses will ever consider the tenure of contested divorce cases, since the same could run into decades

The man will be left paying premiums forever, while the insurance companies and legal advisors will milk the most from such schemes

This PR exercise of perhaps soon to be launched product, also encourages a top up plan to enhance alimony payment

In several divorce cases, courts overlook the earning capacity of women and purely look at the payment capacity of the men

India does not yet permit any pre-nuptial agreements which caps the final payout in case of divorce

Let’s assume man files for divorce in 2019 when his income is X and the divorce is contested for 10 years when his income would have become 3X – How will this scheme benefit the man since his wife can always claim alimony as on present date income (read here as 2029)

Overall such schemes will only benefit greedy women who will want to squeeze maximum payouts from their ex husbands with or without any responsibility or burden

In times when filing false cases to settle scores with husband and his family have become increasingly rampant, such guaranteed insurance payments will be yet another tool for legal money extortion by disgruntled wives

You May Read The Entire Article Below:

Ashmit Gupta, a 38-year old Kolkata businessman who has filed for a divorce, must arrange Rs 30 lakh for the alimony his ex-wife has sought. While he has investments worth Rs 10 lakh that will pay a part of that amount, he is still to arrange Rs 20 lakh within the next few months.

Countries like Egypt are now contemplating a law to make divorce insurance mandatory to ensure that men are able to pay alimony to their ex-spouses without having to face a financial burden. Considering the financial costs linked to a divorce and subsequent payments to the spouse, it could be time for Indians to seek insurance to cover divorces as well.

While India still has among the lowest divorce rates, the numbers have doubled over the last one decade. As per Census 2011, there were 1,362,316 divorces in India. While the number is low compared to other countries, it is still a significant number.

If the average alimony amount per divorce stood at Rs 15 lakh, it is a whopping Rs 2.04 lakh crore in settlements itself for the 1.36 million divorces. Over and above that are the legal expenses and child support which would run into several lakhs of rupees.

It is estimated that the alimony payment amount in India has risen by 35 percent over the last five to seven years.

Taking an insurance policy that pays for the divorce proceedings is a financially-prudent idea. Usually taken at the time of marriage, this insurance product will provide for all financial costs pertaining to a divorce. The premium payable depends on the earning capacity of the individual and the income profile of the couple. There is usually a period of initial two to three years during which a claim is not admissible.

As a starter, policies with a standard cover of Rs 25 lakh or 30 lakh could be offered. These would be priced at less than Rs 15,000 per annum. If any individual seeks additional insurance, top-up plans could be offered.

The amount and duration for which alimony is payable depends on how long the marriage existed. Marriages that last more than 10 years are even entitled to get a lifelong alimony.

In India, there is no cap on the amount of alimony that can be sought by the wife. In case of a lump-sum settlement, the amount could go up to one-third of the husband’s net-worth.

With Indian couples being far more open to the idea of a divorce than a decade ago, it is imperative that the financial costs will also be considered. Having insurance products available for this purpose could help sort out the financial matters and help the couple focus on other crucial matters including property division and child custody.

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