Having a baby is usually a joyous occasion. It’s also an expensive one. In addition to the costs of preparing for and delivering a baby, new parents typically need time away from work.
Currently, under the Family Medical Leave Act (FMLA), employers must let new parents take up to 12 weeks off and guarantee their jobs once they return.
But the law doesn’t require employers to pay for that time off. Although political changes may someday result in federal mandates for paid parental leave, most new parents have to absorb the lost income on their own.
Some employers provide paid time off for new parents, either because it’s mandated by their state or as a company benefit. Paid family leave programs exist in:
- New Jersey
- Rhode Island
- New York
- The District of Columbia
A WorldatWork survey shows about 52 percent of employers offered paid family leave. But only 16 percent of all U.S. workers employed in the private sector were covered by a paid family leave policy in 2018, according to the Bureau of Labor Statistics.
For those who currently don’t have a paid family leave policy at work, there may be an option to replace at least some of their lost income. You can get disability insurance for pregnancy.
Disability insurance is designed to replace your income if you can’t work due to an injury or illness. Policies are classified as either short term or long term, a designation that determines, among other things, how long you can receive benefits.
Many employer-sponsored group short term disability policies will provide some paid benefits during and after pregnancy. In addition, long term disability insurance can help mothers who experience long term complications due to pregnancy or delivery.
A short term disability insurance policy typically considers giving birth a disability. In general, short term disability payments will last for six weeks after normal delivery and eight weeks for a C-section. Some policies will also provide eight weeks of benefits for the birth of twins or triplets.
In addition, complications arising from delivery may extend benefits beyond the normal benefit length. One in four pregnancies have complications that can cause mothers to take additional time off from work. Also, about 15 percent of pregnancies result in postpartum depression, which makes disability insurance for pregnancy a must-have.
The disability period will usually begin the day you give birth. But if you need to leave work prior to delivery, the insurance company will consider you disabled when, as a result of pregnancy, you cannot perform the main duties of your occupation. It begins on the date you stop working as recommended by your physician. However, policies typically dictate that you can’t start disability payments earlier than four weeks before your due date.
Keep in mind that if you choose to stay home during your pregnancy, disability insurance will not provide benefits during that period. On the other hand, you might start collecting benefits if your doctor orders bed rest prior to delivery.
A long term disability insurance policy, whether from a group plan or an individual policy, may also help a new mother following a complicated pregnancy.
Long term disability policies will not provide benefits for the birth itself, either standard delivery or C-section.
But certain long term complications resulting from your pregnancy could qualify for benefits under a long term disability insurance policy. 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.
One thing to keep in mind is that a long term disability policy will have an elimination period. This is the period of time between when a disability occurs and when benefits are paid. Elimination periods for long term disability can be as little as 30 days or as long as a year. The standard length is 60 or 90 days.
If you’re already pregnant, you can still qualify for disability insurance - but that doesn't mean your new policy will cover you during or after your pregnancy.
Individual disability insurance policies typically require underwriting. The insurance company will consider pregnancy a pre-existing condition.
Provided there are no other underwriting issues, the insurer may issue a policy with an exclusion. If you are granted disability insurance coverage with an exclusion, the insurance company will insure you after adding language to your policy that states they will not cover certain body parts, conditions, or disabilities resulting from certain activities. In this case, that means the policy will exclude any disability related to your pregnancy.
Group disability policies, on the other hand, typically do not require underwriting. Therefore you can sign up for coverage even if you are already pregnant.
Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.
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