Divorce which is dissolution of marriage; is the process of terminating a marriage. Divorce is very common in Western countries like US, UK, Canada and France. India is fortunate to have low divorce rates, but this is fast changing. A census conducted way back in 2011 showed 13,62,316 divorces in India. The number is much higher today.
Want to know more on Term Insurance? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
Divorce insurance is usually availed at the time of marriage, and covers financial costs pertaining to a divorce. For shaky marriages, divorce insurance may be a good idea.
The divorce insurance premium depends on your income or the earning profile of the couple. (Husband and Wife). There would be a waiting period of 2-3 years when the divorce insurance claim is not admissible.
Divorce insurance offers standard cover of Rs 25-30 Lakhs. Premiums are in the range of Rs 15,000 – Rs 18,000 a year. You can avail additional insurance through a top-up plan.
Alimony is basically spousal support. The husband has a legal obligation to provide financial support to wife and kids in case of a divorce.
Alimony helps the divorced wife and kids enjoy financial security. There is no fixed amount the husband has to pay his wife and kids. It depends on his income and assets. The family court fixes the alimony (maintenance amount) which is paid each month or as a lump sum.
The divorced lady can file a case for maintenance before the Court. After considering the income, assets and property of the husband, the Court awards a proper maintenance.
There is no upper limit on the alimony amount which can be sought by the wife. For a lump-sum settlement; the wife can get up to one-third the husband’s net worth.
Divorce insurance can be a game changer in such circumstances.
Let’s say a woman is working and earning a decent amount. Now, there’s a substantial difference between her and husband’s net worth. She is granted alimony to enjoy the same living standards as her husband.
The Court looks at the woman’s age, educational qualifications and her ability to earn, before fixing the alimony amount.
Alimony and child support are different. Child support and maintenance must be provided for separately by the father of the child. However, if the woman is earning, she will have to bear child support in proportion to income. If the husband cannot earn due to a disability, and the wife is earning, then no alimony is paid.
Alimony and child support are different. A father must pay for his child’s maintenance. If a woman doesn’t have the money to fight the divorce proceedings, she can ask for interim maintenance. This money would help till the divorce is settled.
The Supreme Court of India has capped monthly alimony at 25% of husband’s gross salary. This moves in-line with husband’s salary.
In case of lump sum settlement, it ranges from 1/5th to 1/3rd of husband’s net worth. This is a one-time settlement.
Alimony which is in the form of monthly or quarterly payouts is treated as a revenue receipt. It is taxed in the hands of the receiver. (The lady has to pay the tax). The alimony is added to her taxable salary and taxed as per income tax brackets. There is no tax deduction available.
A lump sum settlement is considered to be a capital receipt. This is tax-free.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.