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Disability insurance and maternity leave

Disability insurance might be able to supplement your income if you can’t work due to childbirth - but it depends on the terms of your policy.

Disability insurance may be able to supplement your income if you can’t work due to pregnancy, making it easier to take time off when your little one arrives. But not every expectant mother may be able to get coverage.

Some disability policies only allow payouts for strictly-defined reasons that exclude childbirth, while other policies may be broad enough to cover lost income for pregnant women and new mothers. In this guide, we’ll walk through what you need to know about using disability insurance to supplement your income when having a baby.

Can I get disability insurance while I’m pregnant?

To qualify for disability benefits, you must have disability insurance before you become pregnant. Otherwise, your carrier won’t cover any claims surrounding your pregnancy or childbirth because it’s considered a “pre-existing condition.”

If you have a group disability plan, pregnancy might be covered. But if you have an individual policy and choose to stay home while you’re pregnant or after you give birth, disability insurance may not apply since each company treats pregnancy differently.

However, if you experience complications during pregnancy or in the days, weeks or months following childbirth, you might qualify for benefits after the elimination period has passed.

Applying for disability insurance before pregnancy

To make sure you’re covered in case of pregnancy, aim to apply for disability insurance before you start trying to expand your family.

If you’ve previously had healthy pregnancies or births, your insurer will likely cover you during future pregnancies. But in these situations, your policy might exclude complications from birth or pregnancy:

  • If you’ve previously suffered a miscarriage, preeclampsia or another pregnancy-related complication.

What to look for in a disability insurance policy

If you’re planning a pregnancy, ask your disability insurance provider about these features:

  • Mental and nervous disorders. This is a rare provision, but it ensures you’re covered for health conditions like postpartum depression.
  • Residual benefits. If you lose income or working hours because of a disability, this provision will provide a partial payout. A waiting period usually applies before payouts begin.
  • Non-cancelable and guaranteed-renewable. As long as you pay your premiums on time, the insurer can’t cancel your policy or raise your rates.
  • Own-occupation. This means you’ll receive benefits if you can’t do your normal job — even if you’re able to do other work.

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Short-term disability insurance and pregnancy

Short-term disability insurance replaces a portion of your paycheck — generally 60% to 85% — if you can’t work due to illness or injury. It provides coverage for a limited time, and usually caps out at a year.

Under short-term disability, childbirth is often considered a disability. Coverage can last anywhere from 30 days to 1 year – if you have a high-risk pregnancy or experience complications after birth, you may qualify for benefits on the longer end of the spectrum. Some policies pay benefits for pregnancy-induced hypertension or postpartum depression up to a specified period of time.

A “disability” is typically defined as an illness or injury that makes you unable to work. However, insurance providers differ on whether childbirth counts as an eligible disability. Some only provide payouts for pregnancies with accompanying medical complications.

Check with your insurer to find out exactly what conditions are eligible for coverage.

Government Employment insurance (EI) for maternity leave

Government EI benefits are available to cover up to 55% of your income if you’re unable for a variety of reasons including, but not limited to, sickness, childbirth, involuntary job loss or having to take care of someone who’s ill. Each reason represents a different type of EI benefit, and it’s possible to get more than one benefit at the same time.

If you worked enough insurable hours, you can qualify for around 15 weeks of EI. You may also qualify for standard or extended parental benefits for up to 40 or 69 additional weeks. Assuming you can get EI, this means you can take a government-paid parental leave of approximately 1 year to care for your newborn, if you choose.

You can receive more than one benefit under EI at the same time, but the total number of weeks you receive benefits cannot exceed 50 in the same benefit period of 52 weeks (except if you’re combining regular EI benefits with parental benefits to have extended time off with your infant).

Apply for both benefits as soon as possible to avoid going over the maximum number of fundable weeks. Once your benefits expire, you have to work and accumulate insurable hours again before reapplying for EI.

Employment insurance in Canada

Can I get private disability insurance and EI benefits at the same time?

Most likely, your private insurer will offset the amount of disability pay you’re eligible to receive by the amount of EI you’re getting. Insurance companies typically won’t provide payouts until you’ve used up other financial support you’re eligible to receive including employment-sponsored disability payouts and EI. However, individual policies can vary, so check with your provider to find out what options are available to you.

Did you know? If you’re receiving maternity benefits from your employer, CPP and income tax will still be deducted from the amount you receive. Your employer may also have to deduct EI depending on the size of your payout and other factors.

Long-term disability insurance and pregnancy

Long-term disability insurance replaces a lower percentage of your paycheque — usually 60% to 70% — for a longer period of time. Depending on your policy, the benefit period might last up to 2 years, with coverage extending beyond that only if you’re unable to work at any job, not just the one you previously had.

Unlike the short-term policies, long-term disability policies don’t count childbirth as a disability. But they do cover complications experienced as a result of pregnancy. For example, your policy might pay out if you’re on doctor-ordered bed rest. You might also receive benefits if you have a C-section and require more time off than what’s covered by your maternity leave or short-term disability plan.

Bottom line

It’s possible to receive your short- or long-term disability benefits during your pregnancy — as long as your policy was in effect before you became pregnant. If you apply after you’re pregnant, your disability insurance won’t cover any complications that arise from pregnancy or birth.

To purchase a policy that’s tailored to your needs, compare disability insurance companies.

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