Financial stability is a key concern for many new parents as they bring a little human into the world, but how much can income protection help during pregnancy and after the birth?
What does income protection cover in terms of pregnancy?
Income protection insurance provides a percentage of your salary – typically around 70% depending on your product provider – if you’re unable to work for a time due to illness or injury. Pregnancy itself is not considered an illness or injury, so parental leave is not covered under standard income protection policies for regular pregnancies.
Where income protection may be able to help is if something goes wrong during your pregnancy and you experience a complicated or serious event arising from pregnancy that renders you unable to work beyond your parental leave allowance (and after a specified waiting period). Some policies will also cover you if you are ill or injured while on parental leave. Normal and uncomplicated pregnancies, however, including miscarriage and symptoms typical of a normal and uncomplicated pregnancy such as morning sickness, backache and bladder problems (to name a few), are typically not covered by income protection policies.
If approved for income protection as a result of a pregnancy complication or serious event, the ongoing payments for a set period – known as your benefit period – can help you cover living expenses like food, utilities and nappies, so you can take the time you need to recover and are able to return to the workforce.
What pregnancy complications does income protection cover?
This will depend on the insurer. Policies terms will differ, and you need to carefully review them to find out what is and isn’t covered for your specific policy.
Taking out a policy
If you’re planning a pregnancy and considering income protection insurance, you may wish to consider taking out a policy before trying to conceive. Insurers may exclude pre-existing conditions, meaning if you apply after becoming pregnant, complications related to the pregnancy might not be covered. You will also need to choose a waiting period (commonly 30-90 days) before benefits start, so planning ahead is a smart move.
Income protection insurance can offer valuable financial support, but understanding its limitations regarding pregnancy is important. If you’re planning to start a family, book a time to chat here. I can help you find the right policy or review an existing policy early to ensure you’re adequately covered in case of pregnancy complications. That way, you can start your journey into parenthood with greater peace of mind.
Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain and read the Product Disclosure Statement.
