Disability Insurance for Expectant Families

“Worth its Weight in Gold”

Protection During Pregnancy – How does it work?

What is Disability Insurance?

In this blog, we hope to share some information which will answer some questions you may have regarding disability insurance and how it might help as it relates to protection during pregnancy.  I didn’t really worry about it until a friend had a close encounter while traveling abroad, so I wanted to update our readers with a few tidbits of information which might answer some questions or save you from getting into the same type of situation as a friend.

Insurance is all about protection- securing you, protecting your family. When we think of insurance, we normally think of the big four: health, home, life, and auto. But what about disability insurance? You may have never heard of it, and if you have, you may have not considered it unless you perhaps work a dangerous job. Even then you probably feel it an unnecessary coverage plan because of worker’s compensation. Consider this though: According to the Council for Disability Awareness, “95% of accident related disability and illnesses are notwork related,” meaning you would not be covered by worker’s comp, and you would be losing your most valuable asset: your ability to make a living.

There are two main types of disability insurance: Short-term and long-term disability policies. A short-term disability policy lasts between 60-90 days after your claim, while a long-term disability policy kicks in after short-term disability would usually have run out and pays you 50%-70% of your gross monthly income. According to one career research website,“some companies and employees say they offer paid leave when they technically offer short-term disability insurance payments that define ‘disability’ to only  include childbirth and postpartum recovery.” The insurance payments offered through your disability coverage plan can help cover your expenses while you are unable to work.

The long-term policies typically cover you for periods of 2, 5, or 10 years; or you can choose a plan that will cover you until retirement age. Long-term disability insurance is often referred to as income replacement insurance. It protects you and your family in case you cannot work for extended periods but do not have the savings to live long-term (6+ months) without any income.

But when else in your life might you use the benefits of disability insurance? When might you need time off for an extended period, but you aren’t necessarily never going back to work? Do you plan to have a child? This is the part of disability insurance many people overlook. If you plan to start a family, you can utilize disability insurance if you have a child and intend to take time off to spend with your baby as either a mother or a father.

Let’s look at being a mother first. Women who work face a number of issues when it comes to taking time off to start a family. According to Pew Social Trends, half of two-parent households in the United States have both of the parents working a full-time job. However, the U.S. is the only developed nation that does not legally require their employees be paid for leave when they become new parents. And what about fathers? Not only may he want to stay home to spend time with his new baby and the baby’s mother, but if there is an unexpected outcome from the pregnancy such a premature birth, surgery or sickness, the father may need extended time off to spend with the child and mother at the hospital.

Without paid parental leave, expectant parents will often save their sick leave and vacation time in preparation for the new baby. This is a good strategy for people who have had the same job for quite some time, but does not necessarily work well for people who have yet to collect enough paid days off as s/he will need. If you are counting on employer-provided short-term disability, we highly recommend taking a hard look at the policy terms and benefits. Most plans cover 50% -100% your salary for six weeks of postpartum absence, or longer if you have had a C-section or other medical complications.

Let’s look at a few scenarios:

1)  Jodi purchased her short-term disability coverage when she and her husband had been trying to get pregnant for six years. “I knew the policy would cover maternity,” she said, “but I didn’t think I would ever get pregnant. So I got it for general protection with maternity in the back of my mind as a miracle.” In 2010, Jodi got her miracle and gave birth to her son that October. The short-term disability policy provided by her employer allowed six weeks of parental leave, and she used some accumulated paid time off to take two more weeks off since she’d had a C-section. “I needed a little more time to heal,” she said, “and I felt like I got cheated a little since I was down from the surgery.”

2) The second example is from a dear friend of mine, Chelsea. We went to college together, I was in her wedding, and last year she and her husband began trying to get pregnant. One day she called: “We are having a baby in December!” However, just under six months into her pregnancy, she flew with a friend to Greece for a short week-long vacation. On the day they arrived, Chelsea started having pain and had to be rushed to the hospital. The next day she was induced for birth, and she had her first child almost four months early and they both needed to be in the hospital for at least a month, likely longer. Fortunately she and the child are happy and healthy now, but the baby had to stay in the hospital in Greece for four months, which meant she had to live in Greece and miss work. Fortunately she had long-term disability, and she is still at home with her young baby who needs medical attention.

A few additional tips for couples or individuals hoping to start a family:  

1. If your employer offers basic short-term disability insurance coverage, you could  potentially purchase additional coverage through your employer’s plan. Before doing so, we advise that you sit down with your family in order to compare the cost of additional coverage through your employer with the cost of buying a comparable policy on your own.
2. It definitely pays to plan ahead. In most circumstances, you must buy the short-term disability coverage prior to getting pregnant. Otherwise, pregnancy will be considered a pre-existing condition and will not be covered.
3. Your disability period typically begins on the day you deliver, although it could start earlier if you have medical complications during pregnancy that prevent you from working, such as my friend Chelsea.
4. Just to reiterate, if you are planning on getting pregnant, we suggest you check with your benefits department to make sure you understand what types of leave are available to you. There can be a lot of variation by employer within the framework of the Pregnancy Discrimination Act, FMLA, and short-term disability insurance provisions. Remember, in most states, employers are not required to have a short-term disability policy.

Still not sure if you need disability insurance? In the ten minutes it took you to read the above, around 492 people were disabled according to Life Happens Disability Survey. If you still aren’t sure whether you are at risk, we love this quiz that helps you to calculate your Personal Disability Quotient (PDQ).  And of course, if you plan to have a baby, get disability insurance as soon as possible.

Dickey McCay Insurance shares in the joy of news of expecting mothers and families as “Community Matters” and the insurance professionals are available to answers questions regarding policies, best companies to use for disability insurance, and willing to search for the best pricing to secure your insurance protection.  Call today to get these insurance caring professionals working for you.