2021 Guide To Buying Life Insurance While Pregnant

buying life insurance while pregnant

Key Takeaways:

  • Buying life insurance while pregnant is a smart choice that can provide financial security and peace of mind for you and your family! However, pregnancy can complicate the application process, so it’s important to apply early and do your research in order to have the best chances at approval!
  • Everyday Life’s dynamic insurance plans are designed with the needs of growing families and new parents in mind! We automatically adjust your coverage over time to help you start saving immediately. 

Expecting? Congratulations!! 

Being pregnant (especially with your first child) is an exciting time that can also be overwhelming – there’s a lot that soon-to-be parents need to do in 9 months to get life ready for the new baby, and also a huge learning curve. Besides the practical matters, like getting the nursery set up, finding the best carseat, and picking a name, there’s also some important legal & financial matters to attend to. Expectant moms need to think about things like making a will, potentially setting up a college savings account, and buying life insurance so they can give their child the best and safest life possible. 

Estate planning is something a lawyer can guide you through, and saving for college is as easy as opening a separate bank account, but buying life insurance can be much more complicated and confusing, especially for pregnant women. If you have questions or are shopping for a policy, read this 2021 guide to buying life insurance while pregnant for some helpful information and advice!

Why pregnant moms need life insurance

Life insurance is designed to ensure that your dependents’ quality of life will be maintained even if the worst were to occur – it replaces the support that you provide if anything happens to you. 

There are two forms of parental support that life insurance should replace: income support and caregiving support. If you work and earn income, and you have people who depend on that income (your spouse, your kids, your parents, etc.), those people will be left in a difficult position if you pass away unexpectedly. They will need a form of financial provision. Likewise, if you’re a stay-at-home parent, or plan on becoming a stay-at-home parent, then you provide a lot of value to your family in terms of childcare, cleaning, chauffeuring, etc. Without your caregiving support, your family would also be left in a difficult financial position, as they would then need to pay for the costs of childcare and the other roles you performed. They’ll need financial provision as well, which is where life insurance comes in!

Here’s how it works: you buy a life insurance policy for a certain amount of coverage (say, $500,000). Every month, you pay a premium to that insurance company. If you pass away while your plan is still in effect, the $500,000 would be paid out to your named beneficiaries so they can have financial stability. They can use this amount to pay for the costs of your funeral, but also for your children’s college education, for the mortgage, for groceries and vacations and Christmas presents and a million other things and experiences that you would want them to have, and that they would have had if you were here. When your dependents no longer have your income/caregiving support to provide for their needs, the amount they receive from your life insurance policy can permanently affect their future.

Having life insurance is important for anyone with people who depend on them, but parents arguably need life insurance most of all. This includes pregnant parents, as kids won’t be able to provide for themselves until they’re 18 or older. You want to secure the best life for your kids, and that starts by making sure that they’ll be taken care of if anything happens to you, during birth or at any other time! 

The tragic and sobering fact is that the United States has the highest maternal mortality rate among developed countries. Pregnancy can be dangerous. Life can be dangerous, as accidents are the third leading cause of death in the United States, and we’re still in the midst of a tragic and deadly pandemic that no one expected; that’s why life insurance exists! It protects your family from whatever the future holds. 

Can you get life insurance when you’re pregnant?

It’s important to have a life insurance plan when you’re pregnant, but that does not necessarily mean that’s an automatic guarantee you will get coverage. Life insurance companies may approve or deny pregnant applicants on a case-by-case basis. In most cases, you will be able to buy a policy without problems if you are early in your pregnancy and do not have any complications/history of complications. 

If you are in your second or third trimester, you still may be able to get approved. However, you will likely pay a higher premium, getting approved may be more difficult, and it is more likely that your application will be put on hold until after you give birth (for reasons discussed below). If your application is postponed, you will go through childbirth without coverage unless you are able to get temporary life insurance via your employer or guaranteed issue life insurance.

The best time during pregnancy to buy a policy

Many expecting parents are actually surprised to find that they may have missed the window for getting the best possible rates; the optimal time for buying a life insurance policy is actually before you get pregnant! There are two primary reasons for this. The first is that life insurance rates increase as you age, and the second is that pregnancy can affect your premiums or ability to get approved for coverage. (If you’re already past that stage, oh well – you can pass that information on to your friends who don’t have kids yet and maybe save them some money!) The next best time for buying life insurance while pregnant is to do it as early as possible in your pregnancy, preferably during your first trimester. 

Why is it important to apply early, and how can pregnancy negatively impact your chances of getting approved for coverage? Insurance companies decide whether or not to offer coverage and at what cost based on the risk of insuring you. When you apply, you’ll go through an underwriting process where they use a medical exam, health questions, and lifestyle questions to assess this risk. If you’re pregnant, factors like weight gain, gestational diabetes, elevated cholesterol, hyperemesis gravidarum, pre-eclampsia, geriatric pregnancy (past age 35), multiple pregnancy (twins, triplets, etc.), and more can put you in the higher risk category, even if they are common, and the insurance company can either choose to deny you or raise your premiums. The earlier in your pregnancy you are, the less likely that these factors will have significantly changed your health yet or that complications will have developed, so you are more likely to get a better rate. 

Every company handles pregnancy assessment differently; some may use pre-pregnancy records of weight and cholesterol, for example, to set your premiums, but some may use your current health factors. Others may compare your pregnancy markings to “normal” levels and set premiums based on that. Many companies will not approve women who are in their second or third trimesters, though – the closer you are to childbirth, the more likely your application is to be postponed or denied. 

If this happens to you, you can apply after giving birth, but we recommend getting temporary coverage during your pregnancy so that your family is protected until you can get a better policy. The optimal time to apply after pregnancy is between four to eight weeks postpartum; any pregnancy factors or complications will likely be resolved or improving by that time, but postpartum depression and gestational diabetes can still linger, and these conditions can elevate your premiums for years. You may not be eligible for your ideal coverage at this stage, either, which is why applying as early as you can is the smartest financial decision!

Be honest with your life insurance company 

If you become pregnant and already have an active policy, you do not need to let your life insurance provider know you are pregnant. If you are applying for a new policy, though, you do need to inform your life insurance company that you are pregnant during the application process. A pregnancy test is not included in the medical exam that is part of the typical life insurance underwriting process, but your life insurance company will ask you questions about your health during the phone or online interview. Some people think that concealing their pregnancy will help them get lower premiums, but It’s important to be honest with them about your pregnancy; if you lie or omit that information on your application, that could be considered fraud. Your claim may be denied or your death benefit may be reduced to make up for the premiums you should have paid if they had known about your pregnancy. 

What type of life insurance policy should you buy if you’re pregnant?

There are two main types of life insurance: term life plans and permanent (whole) life plans

Term life offers monetary protection for a specific time period, which is generally between 10 and 40 years. It is purely insurance, so it’s very simple. If you pass away during that period, as long as you paid your premiums on time, your beneficiaries will receive the coverage amount you were paying for. That’s it. 

Permanent life plans offer monetary protection for your entire life – whenever you die, your benefit is paid out. This sounds like a better deal at first, but permanent life plans have a complicated cash value component that makes them significantly more expensive, and the truth is that expecting parents don’t need life insurance coverage forever. The goal is for your children to eventually become self-sufficient, and for you to build up enough savings to cover any end-of-life expenses. In most circumstances, it is a smarter financial move to keep your investments and your insurance separate, and purchase a term life policy if you are pregnant. 

How much coverage should you get if you’re pregnant?

The amount of coverage you need when you’re pregnant depends largely on other life factors as well. Is this your first child, and do you hope to have more? Do you already have other children, and are you planning on this being your last birth? Do you have a mortgage, or are you renting right now with the hopes of buying a home in the near future as your family grows?  Are you planning on returning to work after you have the baby, or do you want to become a stay-at-home mom – or will your spouse be staying at home with the children, or will you both be returning to your careers? How much debt do you have? How good is your health? The answers to these questions and more will impact how much coverage you should purchase. Everyone’s life is different! Generally, the more you have to protect, the more coverage you need. If you’re having a baby, you’ll need at least enough coverage to provide for them until they’re a little over 18 years old; if you have more kids, you’ll need that for each child. 

It’s important to not guess when it comes to coverage amounts, though. If you don’t purchase enough coverage, you risk leaving your baby and your family in a financially unstable position if anything happens to you; if you purchase too much coverage, you’re wasting money paying for coverage that you don’t really need instead of spending it on enriching your children’s lives. Everyday Life offers a needs-based insurance calculator for pregnant parents in order to take the guesswork out of the buying process! Our technology will factor in the cost of replacing not only the income parents provide but also things like the caregiving support parents provide their children. This gives you the confidence that your child will be well taken care of through college and until they can be expected to be more self-sufficient. Even considerations for children with special needs are factored in! You can try our Needs Assessment Tool now without having to provide any contact information. 

Should you get life insurance if you plan on becoming a stay-at-home mom, either temporarily or permanently?

Yes! As we mentioned earlier, life insurance is designed to replace both income support and caregiving support. Stay-at-home parents save the family tremendous amounts of money when it comes to childcare costs, cleaning costs, cooking, and more – one report estimates a median amount of $178, 201 annually. Without you, your family would have to replace these costs and may struggle to do so; life insurance could help ensure that the home continues to run smoothly without them having to make any sacrifices in their quality of life or go into debt. 

Should you name your baby as a beneficiary?

Pregnant mothers should not name their unborn child as their beneficiary, and if the policy is purchased after the baby is born, the baby should still not be named as the beneficiary. This is because minors cannot technically manage the money as an adult until they are of age. In situations where a minor is to receive a death benefit from a life insurance policy, the courts will intervene and put the funds in a trust under a court-appointed guardian until the child reaches 18 (this is the case in most states). This legal process is expensive and could prevent the death benefit from being used for the child’s good, or at all, for years. 

Instead of naming your baby as your beneficiary, you should name someone you trust deeply to oversee the benefit – your spouse, or another family member who would be the child’s legal guardian. You can also create a trust to be managed by someone until the child comes of age, but you get to dictate the terms of what will happen to the money if something happens to you. 

Do you need to buy a life insurance policy for your baby?

No. This is a commonly asked question for parents buying life insurance while pregnant, but the purpose of life insurance is to replace your income or support value to your family if something were to happen to you and you were to pass away. The infant mortality rate in the U.S. is lower than it has been in years previously, but besides that, your baby does not have anyone who depends on them, so they don’t need a life insurance policy. 

What to do if you can’t get the life insurance you want during pregnancy

If you were unable to purchase life insurance early on in your pregnancy and have developed high-risk complications, or if there are other reasons (such as your career or health history) that you are unable to be approved for a traditional term life insurance policy, you do have options! It’s important to speak with an independent agent (like us here at Everyday Life) who knows the industry and can inform you of the best course of action to take. In the meantime, seek to join your employer’s group plan, or research whether a non-medical form of coverage such as simplified issue coverage or accidental death coverage may be right for you! Non-medical life insurance can be an easy and inexpensive way to get coverage and peace of mind quickly while you sort through your options. Accidental death insurance and other non-medical policies are available through Everyday Life!

How Everyday Life Insurance saves expecting parents money right away with dynamic term life policies

Everyday Life offers smart term life plans that change over time to fit your growing family and your budget. Most life insurance companies only offer one unchanging rate for one unchanging amount of coverage for the entire term. This doesn’t make much logical sense, though; your life and your insurance needs will change over time! Right now, as you’re getting ready to welcome a new life into the world, you need a lot of life insurance, but in 10 years you won’t need as much, and in 20 years you’ll need even less. Raising kids is expensive enough without paying for unnecessary coverage, so our plans will automatically adjust your coverage and premiums over time using predictive technology. This can save pregnant moms and their spouses between 20-30% immediately and thousands of dollars over the life of the policy! 

Take a look at the real-life example of some of our customers below. If you’re ready to save time, money, and hassle finding your ideal life insurance plan and protecting your baby’s future, apply now in minutes at everydaylifeinsurance.com!

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