There are many things you need to do to get ready for a new addition to your family. In the midst of buying a new crib and deciding on baby names, don’t forget to update your insurance policies. In fact, it’s important to call your insurance advisor before you’re expecting, because in some cases it may be too late to make changes when a child is already on the way.
Health insurance
Before you start your family, find out what your health insurance plan covers when it comes to maternity. Maternity insurance can be difficult to come by:
- Many individual policies — insurance you buy yourself or through a broker — do not cover the medical expense of giving birth to a child.
- Individual plans that do offer maternity coverage may do so with an expensive rider that adds cost to your basic premiums.
You may have better luck getting maternity coverage through an employer-sponsored medical plan or an association-group plan. However, make sure you have coverage before you and your spouse are expecting a child, because you could be denied an insurance policy if you apply for an association-group plan while pregnant.
Wherever you buy your maternity coverage, make sure that it includes:
- Hospitalization, including the costs of your room, board, and incidentals
- The cost of delivery (C-section and traditional)
- Surgeon fees and other surgical expenses
- Prenatal doctor visits, neonatal screenings, and tests
- Prenatal vitamins
- Well-baby care
- Emergency procedures related to the pregnancy or birth
Life insurance
If you don’t already have life insurance, you may want to purchase a policy so that, if anything happens to you or your spouse, the surviving partner will have the resources necessary to care for your child.
- If you’re a woman, it’s important to apply for life insurance before you’re expecting a child. Life insurance companies still consider it a risk to insure a pregnant woman and may not insure you if you’re pregnant. Or, if they do insure you (which is unlikely), they may charge you a much higher rate.
- Because it limits coverage to a predetermined number of years, term life insurance is often the cheapest option. You can choose a term that’s right for you — either 10, 20, or 30 years. Often, families buy a term life policy for a time period that’s long enough for them to get their children raised and out the door.
- If you purchase term life insurance, make sure you get a policy where you have the option to convert it into a permanent life policy at the end of the term, if you choose to do that.
Long-term disability insurance
With a child dependent on you, it becomes more important than ever to have a LTD policy that will help you continue to care for your family if you can no longer work.
- If you already have an LTD policy, make sure you have enough coverage. With a baby, your monthly expenses may increase, which means you may need a higher monthly benefit if you become disabled.
- If you have a policy through your employer, you may want to purchase additional LTD coverage, as employer LTD typically only covers 50 – 60 percent of your income.
- If you don’t have LTD coverage yet, now is a good time to purchase a policy. It may be easier to pass the physical exam, and your premiums may be lower, when you’re young and in good health.
