Does disability insurance cover pregnancy? It absolutely can. However, there are different types of disability insurance products, such as short-term disability insurance and long-term disability insurance, and the type of coverage needed may depend on whether the pregnancy involves complications.
Pregnancy, the FMLA and Disability Insurance
According to the BabyCenter, research has shown that women in the U.S. take an average maternity leave of 10 weeks, and 23% of working women return to work after a mere 10 days.
Many women would no doubt prefer to take more time off work to care for their newborn, adjust to motherhood and deal with the physical complications of birth. In some cases, women may not be physically ready to return to work so soon, and forcing an early return may be detrimental to their health – but they may feel that they can’t afford to take more time off.
Under the Family and Medical Leave Act (FMLA), eligible employees of covered employers can take up two 12 weeks of leave in a 12-month period for the birth of a child and the care of a newborn child. However, small employers with fewer than 50 employees are exempt, and employees aren’t eligible unless they have worked for a covered employer for at least 12 months and they worked a minimum of 1,250 hours during the 12-month period before leave starts.
Also, FMLA leave is typically unpaid. Covered employers have to grant you the time off without threatening your job, but they don’t have to pay you a dime.
A few states have enacted laws that mandate paid parental leave for eligible workers. However, in the U.S., most workers don’t have access to this right. That’s why disability insurance is so critical for women.
Pregnancy Complications May Require More Time Off
Everything above applies to a normal pregnancy in which everything occurs perfectly – but not all pregnancies are like that. Pregnancy complications are common, and they can put both the mother and baby at risk. In many cases, bed rest is ordered – and that means the mother needs to take additional time off work before the birth of the baby. Once again, job-protected leave may be available under the law, but it may not be paid, putting working women in an impossible situation.
According to Johns Hopkins Medicine, approximately 8% of all pregnancies involve complications that could harm the mother or baby if left untreated. Common complications include hyperemesis gravidarum, gestational diabetes, placenta previa and preeclampsia.
An 8% chance may seem small, but it works out to nearly one out of every 12 pregnancies. Pregnancy complications are common, and working women who plan on becoming pregnant should be prepared for the possibility.
When Does Disability Insurance Cover Pregnancy?
The good news is that disability insurance can cover pregnancy.
A short-term disability insurance policy can help with a normal pregnancy that does not involve serious complications. If there are serious health complications and the woman needs additional time off to recover, a long-term disability insurance policy may provide needed coverage.
How Disability Insurance Works
Disability insurance is sometimes called paycheck protection or income protection. It protects the policyholder’s income against the risk of disability by replacing a portion of the policyholder’s pre-disability income during a period of disability.
When comparing disability insurance policies, there are several key features to consider, including the following:
- The benefit period. This is how long the policyholder can continue to receive monthly disability insurance benefits, assuming they still meet the criteria.
- The elimination period. This is how long the policyholder has to wait between experiencing a qualifying disability and receiving benefits.
- The definition of disability. This is how the policy defines disability, and it determines when the policyholder qualifies for benefits. Most policies define disability based on the policyholder’s ability to work, but some conditions may be excluded.
- The additional terms. Policies can include various riders that provide additional benefits.
Short-Term vs. Long-Term Disability Insurance
There are different types of disability insurance, but policies can typically be divided into short-term policies and long-term policies.
- Short-term disability insurance provides shorter benefit periods and shorter elimination periods. The benefit period is typically around three to six months and not more than a year. The elimination period may be one or two weeks, but it may be slightly longer or even shorter. Short-term disability insurance is often provided through the employer as a group benefit, but individuals can purchase coverage on their own.
- Long-term disability insurance provides longer benefit periods and longer elimination periods. Long-term disability is sometimes available through an employee benefits plan and can also be purchased individually, through an individual disability insurance plan. The benefit period is typically for at least two years and may extend until the policyholder reaches retirement age. The elimination period is typically around 90 days, but longer or shorter elimination periods are possible. Individual disability insurance is portable (follows you to any job) and typically has more robust coverage terms than group, employer-sponsored policies.
Working women may need both short-term and long-term disability insurance to cover their pregnancy risks.
How Disability Insurance Covers Pregnancy
Pregnancy is the leading cause of short-term disability claims. According to the Council for Disability Awareness, pregnancies account for 22.3% of all short-term disability claims.
To use short-term disability insurance to cover a pregnancy, the woman should contact the insurance company about filing a claim. Once the woman needs to take time off, there may be a short elimination period before she can start receiving benefits. This time can be covered either with paid time off days available from the employer or savings that the worker has. Once the elimination period is over, the worker will begin receiving benefits for the benefit period.
Short-term disability insurance works well for most pregnancies because it has a short elimination period. Even though the benefit period is short, it is usually sufficient to cover maternity leave.
Long-term disability insurance may not be suitable for typical pregnancies because of the elimination period. If a policy has a 90-day elimination period – which is typical – maternity leaves that last for less than 90 days won’t be covered at all.
However, long-term disability insurance may be needed for pregnancies with serious complications that require a much longer period of time away from work. During the elimination period, the worker may use savings or benefits from a short-term disability insurance policy to cover the lost income. Once the elimination period is over, the worker will begin receiving monthly benefits until the benefit period ends or she can return to work.
Protecting Working Women
The CDC says there were more than 3.6 million births in the U.S. in 2021. That’s more than 3.6 million women going through pregnancy – and many of them are working mothers. Due to the lack of paid family and medical leave in the U.S., working women need another way to cover their time off from work. Insurance brokers can help by making sure women have access to the coverage they need.
Help women obtain disability insurance for pregnancy and other risks. The DI for Women Sales Kit includes key facts, insider sales tips, client handouts and more. Download the DI for Women Sales Kit.