The Best Time to Buy Life and Disability Insurance If You’re Planning a Family

Pregnancy can be an incredibly rewarding, yet trying, time. Think of all the things you have to do to prepare for the baby: painting the baby’s room, assembling the crib, baby-proofing the house, and getting more financially savvy. This can be the impetus to finally do the things that we know we should do but have been putting off, like drafting our first ever will, researching 529 plans, or finally looking into those pesky insurance policies.

The most common insurance policies I see pregnant couples concerned with are disability insurance and life insurance, which makes total sense. We want to provide financially for our baby if something happens to us, whether we’re still here or not. 

I’m going to be brutally honest — for men, this is generally a fine time to apply, and there’s usually no downside. For women, pregnancy can complicate qualifying for insurance. If you are a woman, the best time to apply for disability and life insurance is BEFORE you get pregnant. Much before. Here’s the nitty gritty of why.

Disability insurance: What insurers really say

I thought it would be helpful to hear this from the horse’s mouth so to speak, to emphasize how seriously underwriting will view a pregnancy. These are excerpts from conversations I’ve had with different insurance companies about how they treat pregnant applicants:

Insurer A

“If the client is currently pregnant, and not experiencing any significant complications they would get a pregnancy exclusion. There are some variations in wording depending on the state of the contract, but all have the same effect. They exclude pregnancy risks from the contract. We write cases into the third trimester of a pregnancy, but there are some more stringent underwriting rules related to third trimester pregnancies as far as timing of the offer goes as these do present additional risk and there are also some state variations to our guidelines there as well. 

Most pregnancy exclusions can be reconsidered after the client has a normal delivery, a normal postpartum checkup and the client has returned to work with no limitations or restrictions.”

Insurer B

“When it comes to pregnant applicants, we exclude the current pregnancy (assuming it a normal pregnancy) regardless of trimester. If there are current complications or a history of (such as preeclampsia, condition requiring bed rest, etc), we would postpone until after delivery when they are back to work full time for at least 3 months. “

Insurer C

“We would exclude pregnancy for any applicant that is currently pregnant. Underwriting must be complete and the policy must be placed in force while the client is still actively working. If maternity leave begins during the underwriting or delivery process, we must postpone until the client is back to work on a full time basis without restriction.”

Insurer D

“Anyone who is currently pregnant will get an exclusion for the current pregnancy minimum. There used to be a rule that said you could not apply in the third trimester but they have moved away from that. They now allow you to apply in the third trimester as long as the policy is approved and placed prior to delivery. If a client gives birth while in underwriting then they will postpone until back to work a minimum of 30hrs per week.”

Life insurance: Pregnancy creates new roadblocks

For life insurance, a current pregnancy is similarly problematic. Here’s some of the issues I’ve run into with applicants:

• Some life insurers won’t insure a currently pregnant woman at all.
• Abnormal bloodwork (common during pregnancy, since you’re growing another human inside of you) can harm your ability to qualify and raise your rates.
• A temporary condition like gestational diabetes isn’t that uncommon in pregnancy, and will usually resolve soon after delivery. However, a diagnosis of “diabetes” on your medical chart can harm your life insurance application for years.

You could wait until after the delivery to apply, but then you wouldn’t have disability insurance coverage during the delivery. I’m not going to quote statistics to be scary but there’s a reason why some companies won’t offer insurance until after the child is delivered. They have a lot of data, and it tells them that it’s a losing proposition for them. 

The takeaway

For insurance purposes, if you’re planning to start a family, don’t wait to apply until you’re expecting. At a minimum, if you apply for disability insurance while pregnant, the policy will not cover you if you become disabled as a result of that pregnancy. To make matters worse, women pay more for disability insurance than men do — one of the main reasons being the added risks of pregnancy.

Not only do you have a higher cost of disability insurance, but now you aren’t even getting the added protection that you are already paying more for (your premium will not change at all because of a pregnancy exclusion).

For men, really the only downside is if you took paternity leave during the application process. They won’t approve your policy until you go back to work full time.

I highly recommend looking into life and disability insurance the moment you start seriously thinking about having kids with your special someone. 

• You’ll qualify more easily.
• You’ll avoid frustrating exclusions.
• You’ll likely lock in lower rates.

The best gift you can give your future child — besides love and care — is financial security. And that starts with protecting yourself before pregnancy.