Disability Insurance - Pregnancy Coverage and Partial Disability language

[uncleezno]

Hi All,

My wife is a 1st year MFM fellow coming up on her insurance anniversary, so we're looking to buy DI. I've got quotes from some good people - including some recommended on here - and I narrowed it down to three carriers: Guardian, MassMutual, and Principal. I've also done a lot of reading and searches on the subject, so I hope I'm not repeating common questions - apologies if that's the case.

Here's what I'm wondering -

1) Both types of MassMutual plans I looked at - Radius and Radius Choice - explicitly exclude any normal pregnancy from coverage. Literally nobody else does that; if you're a woman considering having kids, that's insane, right? What's the point of them offering unisex rates if they don't cover pregnancy? I think they're out of the running.

2) Guardian clearly offers the most comprehensive coverage at a high cost; you can add in catastrophic coverage, full mental health coverage, enhanced partial disability coverage, COLA, etc. Principal, however, seems to offer similarly-worded riders at a slightly lower cost. My favorite agent told me that she doesn't love the way Principal talks about partial disability eligibility: does anyone know what the language looks like for Guardian vs. Principal? Are there any other reservations about Principal I should be aware of?

 

Researching DI has been a pain in the butt and it's ridiculous that such an opaque product is sold solely through agents to people who don't know how to manage their money. Thank you to everyone here for helping make it less of a pain in the butt that it could have been!

[Craigy]

If pregnancy coverage is a big deal to you, then yeah you should pass up on those policies.

Excluding normal pregnancy isn't insane per se, particularly if they're able to offer you a lower rate because of it.  They don't cover a lot of other natural healthy things too like sleeping, lunch, vacation.  

[Hatton]

Since your wife is a MFM you may think all pregnancies  end in disaster.  They don't.  What you want to make sure you have is coverage for a pregnancy complication not a normal pregnancy.  I had Guardian when I had insurance.  I dropped it when I reached FI.  BTW I am an OB/GYN.

[DK Unger]

1) Both types of MassMutual plans I looked at – Radius and Radius Choice – explicitly exclude any normal pregnancy from coverage. Literally nobody else does that; if you’re a woman considering having kids, that’s insane, right? What’s the point of them offering unisex rates if they don’t cover pregnancy? I think they’re out of the running.

 

Disability income insurance carriers impose a minimum 90 elimination period on normal pregnancy which is redundant since a normal pregnancy will not disable for that long. Complications of pregnancy are covered subject to the definition of disability and the policy's elimination period. If one previously had a c-section, miscarriage, etc, then complications of pregnancy are very likely to be specifically excluded on fully underwritten policies. Hope that helps.

 

2) Guardian clearly offers the most comprehensive coverage at a high cost; you can add in catastrophic coverage, full mental health coverage, enhanced partial disability coverage, COLA, etc. Principal, however, seems to offer similarly-worded riders at a slightly lower cost. My favorite agent told me that she doesn’t love the way Principal talks about partial disability eligibility: does anyone know what the language looks like for Guardian vs. Principal? Are there any other reservations about Principal I should be aware of?

 

You can add COLA, Catastrophic, etc on Principal's policy as well. However, I would say Guardian has a better COLA rider since it guarantees a 3% adjustment and any COLA increases remain on the policy after you recover without additional premium. For a partial disability, Guardian's loss of income trigger is 15% versus Principal's 20%. Furthermore, if you have Guardian's "Enhanced Partial Disability Benefit rider" then Guardian will pay a "loss of income indemnity" for the first 12 months of a partial claim. That is, the monthly benefit payable will be whatever your loss of income is up to the policy's maximum monthly benefit. For instance, if you have a $5,000/mo benefit policy, earn $20,000/mo, and lose $5,000/mo of income due to disability, you receive 100% of the monthly benefit for the first 12 months ($5,000) and 25% thereafter ($1,250). With Principal under the same scenario, you would receive a minimum of 50% of the monthly benefit ($2,500/mo) for the first 6 months and then 25% of your monthly benefit ($1,250) thereafter.

[Dreamgiver]

I think that what you are looking for is paid maternity leave. DI is not the best place to look for that (normal pregnancy is not defined as a disability), your employer might have something setup. However, as professionals, we really don't usually get maternity or paternity coverage. We work=we get paid, we don't work=we don't get paid.

[wideopenspaces]

Dreamgiver wrote:

I think that what you are looking for is paid maternity leave. DI is not the best place to look for that (normal pregnancy is not defined as a disability), your employer might have something setup. However, as professionals, we really don’t usually get maternity or paternity coverage. We work=we get paid, we don’t work=we don’t get paid.

Click to expand...

That's pretty rough. I got 12 weeks of paid maternity leave.

But I don't think you need to worry about DI not covering a normal pregnancy because as such, you aren't disabled. But you would want it to cover complications, in case she had to go on bed rest starting at 12 weeks or something ridiculous like that. Being young and healthy, getting pregnant is one of the riskiest things a woman in the typical age range can do (as your wife well knows). But now I'm wondering if my DI covered that . . .

[DMFA]

Pregnancy is usually covered under short-term disability policies, right? That's how my wife's is at her job. I got very apprehensive when I saw deductions for STD on her pay stub at first...

[ID Doc]

Agree with the other comments - you don't need coverage for a normal pregnancy from your long term disability insurance policy. Check to see if your wife's employer offers short term disability - I think most policies will pay 60% of salary for 6 weeks after delivery. Some employers offer this as a standard benefit with no payroll deduction - with others you need to sign up. And she may also need to be employed for a certain amount of time before she would be covered. My wife has taken two unpaid maternity leaves because of those caveats. The first was right after she started fellowship and she needed to be employed for one year before she was eligible for the STD coverage. The second was because I overlooked that her current employer only offers it as a payroll deduction, not automatic as our prior employers, and we didn't sign up. Although the rules were you had to have it in place at least 10 months before delivery and had to keep it for some period of time after that too. In the end considering the premiums we would have paid to have it, it would have only saved us about $2,000 or $3,000, even if we would have timed it perfectly.

[Miss Bonnie MD]

wideopenspaces wrote:

Dreamgiver wrote:

I think that what you are looking for is paid maternity leave. DI is not the best place to look for that (normal pregnancy is not defined as a disability), your employer might have something setup. However, as professionals, we really don’t usually get maternity or paternity coverage. We work=we get paid, we don’t work=we don’t get paid.

Click to expand…

That’s pretty rough. I got 12 weeks of paid maternity leave.

But I don’t think you need to worry about DI not covering a normal pregnancy because as such, you aren’t disabled. But you would want it to cover complications, in case she had to go on bed rest starting at 12 weeks or something ridiculous like that. Being young and healthy, getting pregnant is one of the riskiest things a woman in the typical age range can do (as your wife well knows). But now I’m wondering if my DI covered that . . .

Click to expand...

Lucky! Looks like 8 of my 12 weeks will be paid.