N.C. entrepreneur married to divorce insurance

If North Carolina’s 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 and chief executive officer of SafeGuard Guaranty Corp., an insurance company in Apex, N.C., near Research Triangle Park, an-nounced plans to offer divorce insurance internationally in early 2007.

“We’re on the tail end of funding, but everything else is ready,” Logan said. “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 to be in the 50 percent of marriages that eventually fail every year. Today, the odds that a marriage may end in divorce are very real, regardless of a person’s socio-economic status.

“Times have changed,” he said. “Divorce rates here in the U.S. 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 U.S. and that’s a recipe for financial disaster. Most people overlook that. And it’s worse elsewhere.”

In a recent Journal of Sociology article, 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 percent more wealth per person than singles will, but the divorced are worse off, losing an average of 77 percent of their net worth.

According to Logan, other research points to divorce being 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.

Whether SafeGuard’s offering will meet with 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 U.S. 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.