Buying Coverage For Your Pregnancy
Every mother-to-be dreams of what the future will hold with your new bundle of joy and you want to do everything you can to assure it will be the best possible future. While no one plans to have a complicated or difficult pregnancy and or delivery, it happens and you want to be prepared for this. New long term disability claims resulting from pregnancy and childbirth represented 10.6 percent of new long term disability claims for women in 2012 and 2013.1
Planning ahead financially can help to lead to a stress-free maternity leave with your new baby, but what if you suffer a complication during the pregnancy that leaves you unable to work for months before you deliver? Or there is a complication during delivery and you have suffer medical condition that prevents you from returning to work after 6-12 weeks of maternity leave? An individual long-term disability insurance policy can contain a provision that will cover complications of pregnancy so long as the complication causes you to suffer a medical condition that keeps you from working or returning to work, for longer than your elimination period (typically 90 days).
The key to obtaining a policy that will cover you for such unexpected events during your pregnancy, is to purchase the policy before you become pregnant. Insurance companies consider pregnancy a pre-existing condition if you are already pregnant when you apply for the coverage. They will exclude your current pregnancy from the coverage.2
We receive phone calls every day from women who are currently pregnant and looking to purchase a policy to protect their incomes should a complication arise. It is one of the most common calls we receive. And most women are surprised when we have to tell them that since they are already pregnant, they cannot buy a policy to cover their current pregnancy.
We try to explain that it is similar to having an accident with your car, then purchasing the auto insurance after and wanting the insurance company to pay for the already existing condition of the car. So if you are planning a future family, apply for your disability insurance policy now, before you are pregnant.
There is good news even if you are currently pregnant but have not purchased long term disability insurance yet. The good news is that most likely, you can still purchase a long term disability insurance policy. However, this policy will exclude for your current pregnancy and would not cover you should you suffer any complications. But this does not mean you should not buy your disability policy now.
There are a few things to keep in mind about buying disability insurance. If you purchase the policy now while you are pregnant, yes, your current pregnancy will not be covered, but you will be buying coverage at a younger age, so you will be paying a lower premium. Also, once you have delivered your baby and you are back to work full-time, you can have your exclusion reviewed to see if it can be removed. If it is removed, assuming you had a uncomplicated, normal pregnancy and delivery, then any future pregnancies will be covered by this policy, should you suffer a complication that last longer than your elimination period.
You should buy a high quality disability insurance policy to cover any illness or injury, although not your current pregnancy, while you can lock in a lower premium at your age now, and your health now, before you get older and have to pay more, or possibly suffer an illness or injury that could prevent you from buying a policy at all in the future.
Keep in mind that if you have had any type of fertility issue, or miscarriages, etc. in the past, the insurance company will exclude for pregnancy even if you are not pregnant, as these too are pre-existing conditions. But this exclusion could be reviewed and removed if you have a normal, uncomplicated pregnancy and delivery in the future, so again, any other future pregnancies could be covered later once the exclusion has been reviewed and removed.
Individual disability insurance plans do not cover normal, uncomplicated pregnancies or maternity leave and most pregnancies do not result in payable long term disability claims. Typically in order to cover a normal 6-12 week maternity leave, your employer would need to offer a group short-term disability policy that has a provision to cover you for maternity leave. These group short term disability insurance plans can be paid for your employer, or they can be paid for by the employees themselves. These plans usually pay you a percentage of your income, such as 60% for the first 6 weeks of maternity leave and then may reduce in benefit amount, for example they may reduce the 60% to 40% of income for weeks 7-12 of maternity leave if you take all 12 weeks of maternity leave.
Individual short-term disability plans do not pay for normal maternity leave, so there is not a way to secure a plan yourself individually for your maternity leave if your employer does not offer an option for such a short-term disability plan. If you find yourself without a group short term plan, as most women do (most employers do not offer these types of plans), then be sure to plan ahead and save enough money to cover your bills, spending needs and new baby needs short term while you are on maternity leave.
As with any type of insurance, you need to buy it before it is too late. As you are planning your family and your future, be sure to plan for your financial future as well. As women, we need to plan in advance of building a family and purchase a long term disability insurance policy before we become pregnant, so that any type of long term complication that could occur can be covered under our policy. Knowing you have done the proper planning to financially cover you and your family in the event of an unfortunate complication during your pregnancy will help to ease your mind during such as exciting time of your life during your pregnancy and your new baby’s arrival.
1. 2014 Council for Disability Awareness Long Term Disability Claims review http://disabilitycanhappen.org/research/CDA_LTD_Claims_Survey_2014.asp
2. In Texas, companies can put a pregnancy exclusion on a current pregnant applicant, but the exclusion wording does not have pregnancy complications included. In California, not all companies will offer a policy to pregnant women in their 3rd trimester of pregnancy, as other states will.
Susan Campbell holds a Financial Representative contract with The Guardian Life Insurance Company of America based out of New York, NY. The information displayed on this page are the opinions and views of the author, and are not necessarily the opinions and views of The Guardian Life Insurance Company of America (Guardian), or any company that is an affiliate or subsidiary of Guardian.