What to know about disability insurance & pregnancy

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What to know about disability insurance & pregnancy

Paid maternity leave isn’t mandated in the U.S. It’s the only developed nation that doesn’t provide any sort of paid leave. It’s a pain, and it leaves families to turn to another source of income after a pregnancy: Disability insurance.

On the surface, it makes sense. Disability insurance is income protection, and you’re often unable to work due to pregnancy, so it seems like a good fit. But can you actually use your disability insurance to help make ends meet during maternity leave? Not typically, but there are some cases where you’ll be covered.

Maternity leave & long-term disability insurance

In short, you can’t buy disability insurance and then elect to stay home on maternity leave. Why? Because anything that’s considered elective is not covered under long-term disability insurance. Bed rest on doctor-ordered home leave would qualify you with some carriers, but if you choose to stay home and care for your newborn, that won’t make the cut as far as insurers are concerned.

Definition of disability

However, what is covered by your disability insurance is complications during pregnancy. For example, C-sections can lead to time off that’s longer than what’s covered in maternity leave or a short-term disability plan (see below). Most long-term disability carriers will cover complications if you have an elimination period of longer than 90 days. (The elimination period is how long after you become disabled before you start receiving benefits.) Some carriers will have a 90-day elimination period for pregnancy even if the elimination period on other disabilities is shorter than that.

Common pregnancy disabilities

Why do pregnant women need disability insurance? Because complications, at least as they’re defined by insurance companies, aren’t as uncommon as you might think – one in four pregnancies have complications that can cause mothers to take additional time off from work.

Besides recovery from C-sections, there’s also postpartum depression to consider. According to the National Institute of Mental Health, nearly 15% of pregnancies result in PPD. It’s important to ensure your policy covers mental nervous disorders in the event of PPD; it will allow you the time you need to get the proper treatment and recover. Pregnancies can also accelerate dormant illnesses and other conditions, which means a long-term disability insurance policy can help in the event of unforeseen illnesses. (You can learn more about how long-term disability insurance works here.)

Pregnancy & disability exclusions

One important caveat to the coverage of complications is exclusions. Exclusions are, essentially, disabilities that won’t be covered by your insurance. These are outlined in your policy and are usually because of previously existing conditions.

When it comes to pregnancies, if you’re applying for a disability policy and have previously had complications, like a C-section or miscarriage, those complications will be excluded on your policy (but will usually be removed if you then go through your pregnancy without any problems).

Applicants can buy long-term disability insurance during pregnancy, with a few notes. If bought during the first two trimesters, the carrier may exclude the pregnancy from coverage. During the third trimester, insurers will postpone any offer until after birth and after the applicant has returned to work for 30 days.

Other disability insurance features

In addition to pregnancy-specific considerations described above, there are some general long-term disability insurance policy features and provisions you should think about when looking for the perfect policy:

  • Own-occupation – An own-occupation policy is one that says you’ll get benefits if you can’t do your normal job. That means you’ll still be paid if you’re able to do other work. Learn more about own-occupation policies, and the different types, here.
  • Non-cancelable – This means the insurer can’t raise your rates. Since raising policy rates is rare, and most policies have this feature built in anyway, it’s usually not something you need to worry about, but it’s nice to know it’s there.
  • Residual benefits – If you’re able to work but not at the same rate as before – either your hours are cut short or your income is less – a policy with residual benefits will provide a partial payout.
  • Guaranteed Renewable – The insurer cannot cancel your policy as long as you’re paying for it.

Maternity leave & short-term disability insurance

One last note: Some short-term disability group plans, like those provided by employers, may list normal pregnancy as a disability in lieu of a defined maternity leave policy. However, you still can’t buy an individual plan for elective time off, as the benefit period for short-term plans is less than 90 days. A long-term disability insurance plan would be able to help support you under longer circumstances, if health issues or complications arise.

Overall, it’s best to buy a disability policy early, while you’re young and healthy, so you don’t have to worry about these exceptions, and to work with a licensed agent or broker to get the coverage you need to protect your income and your current (and future) family.

Got more questions about income protection? Visit our Disability Insurance Learn Center.

Image: Portra