Two new divorce insurance products are being launched on the market by ARAG. The new insurance products are called “Pre-nuptial Legal Solutions” and Divorce Legal Solutions”.
As the first of their kind to hit the UK market, these products provide a legal expenses insurance policy that starts from the date of a marriage or civil partnership and protects the policyholder against legal costs associated with matrimonial breakdown.
Sold alongside nuptial agreements, both policies cover costs arising from a legal challenge to the nuptial agreement whilst Divorce Legal Solutions extends cover to include the cost of divorce proceedings.
The opportunity for nuptial insurance products was recently highlighted in the landmark case of £100m heiress Katrin Radmacher where her pre-nuptial agreement was upheld in the Supreme Court, reducing her ex-husband’s settlement from £5.8m to around £1m, and the Law Commissions consideration of a statutory framework for pre-nuptial agreements.
This combined with the restriction on legal aid for most divorce cases and proposed reforms to civil litigation, means that the popularity of nuptial agreements is very likely to grow. This in turn will increase interest in insurance products that protect against the burden of legal costs in divorce.
With a flexible amount of cover available, Pre-nuptial Legal Solutions will cover legal costs and expenses involved in a challenge to a pre-nuptial agreement, including:
– Costs of mediation
– Costs of legal proceedings if the policyholder or their spouse cannot reach agreement through mediation
Divorce Legal Solutions covers the same costs and also extends cover for:
– Divorce proceedings to final decree
– Ancillary relief and challenge to a nuptial agreement
Tony Buss, MD of ARAG said: “While some may see the very idea of divorce insurance as unromantic, the realities of modern life and the government’s legal aid and costs reforms will make it harder for ordinary people to access justice before the courts, meaning this is the right time to launch such a product.”
Source : ARAG
