Income protection and pregnancy
Here's how income protection can and can't help during pregnancy
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Your income protection policy won't payout if you're on pregnancy leave. However, some policies may offer protection for specific complications, including post-natal depression, which prevents you from returning to work. There are also income protection policies available which allow you to pause your premium payments during maternity leave. This is known as a pregnancy premium waiver.
Will Income Protection cover me for pregnancy complications?
It is possible to get cover for pregnancy complications through your income protection policy. In 2010, CommInsure removed post-natal depression from its list of full exclusions, meaning cover is available for this condition which affects 16% of women.
You can also receive a benefit before the end of pregnancy or childbirth for a pregnancy-related condition. Such conditions include:
- Pre-eclampsia and eclampsia
- Placenta previa
- Hyperemesis gravidarum
- Uterine rupture
- Gestational diabetes
- Antenatal depression
Be sure to read your PDS thoroughly as many income protection policies will not cover you for pregnancy complications.
If you can't find adequate cover for pregnancy with an income protection policy, you can often get protection for specific complications as an optional benefit in trauma cover. Benefits covered generally include:
- Complications of pregnancy including ectopic pregnancy, eclampsia or disseminated intravascular coagulation.
- Congenital Abnormalities which can help out financially if your child is born with an abnormality such as blindness, deafness or Down syndrome.
- Death benefit if the child dies during or shortly after birth, or is stillborn at least 20 weeks into the pregnancy.
Keep in mind that waiting periods apply, usually around 12 months, and cover is limited to certain ages. Always read the product disclosure statement (PDS) as well to see exactly what is covered.
What is a 'Pregnancy Premium Waiver'?
Some insurance companies now offer a pregnancy premium waiver benefit to their income protection policies to help tailor this type of cover to suit women. This feature acknowledges that the birth of a child is accompanied by significant financial pressures and allows you to opt out of paying your premiums for a specific period of time.
The waiver ensures that your cover will remain in place while you're off work during your pregnancy, eliminating the hassle of re-applying for cover when you return to the workforce. It also guarantees continuity of cover, as most life insurance providers will pay your premiums for a period of up to six months. Even if you're on maternity leave, you have the peace of mind knowing that full cover is still in place.
In order to be eligible for the pregnancy premium waiver:
- You must not be currently working;
- You must be in the second trimester; or
- No more than six months can have elapsed since you gave birth.
How can a Pregnancy Premium Waiver help?
If you elect to take maternity leave and have selected the pregnancy premium waiver with your income protection policy, you can get up to 6 months cover. It won't pay you for being off work due to anything pregnancy-related in that time, but it can pay you if something happens and you are off work due to an accident or illness. For instance, if you injure your back whilst at home at the end of your 6 month on maternity leave, your income protection insurance should still cover you.
Which providers have pregnancy-related features in place?
|Asteron||Income Protection Plus, Income Protection, Income Protection - Accident||Pregnancy Premium Waiver|
|CommInsure||Income Care Platinum||Total Disability cover|
|MLC||Critical Illness||Specified Complications of Pregnancy|
|OnePath||Specialist Cover||Income Secure Cover|
|TAL||Income Protection||Illness Cover - Total Disability|
Pregnancy exclusions - be clear on your options
There are some pregnancy exclusions on income protection policies that you will need to be aware of. Generally speaking, policies do not cover uncomplicated pregnancies or childbirths, if you don't meet a waiting period of more than three months. The reasoning behind this is that there are other types of insurance or even employment perks to cover you in this situation. If a pregnancy causes a disablement, you'll need to pass your waiting period (usually three months) before cover kicks in.
Of course, some income protection policies will exclude any claims arising from pregnancy, giving birth, miscarrying or having a pregnancy termination altogether, so make sure you know exactly what your chosen policy does and does not cover.
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