Individual short term disability insurance puts you in control of your income. Unlike group coverage, private contracts allow you to own your policy. You do not have to rely on an employer to pay the premium cost. Your plan remains in force no matter where you work.
There are important pregnancy-related features that vary based upon where you buy the contract, and the company issuing the plan. There are subtle distinctions that have a huge impact:
- Policies for maternity leave
- Monthly cost and benefits
- How to get covered
- Covering pregnancy bed rest
Individual Short Term Disability for Maternity Leave
The most important distinction relates to individual short term disability insurance for maternity leave. Only policies covering normal childbirth replace income during maternity leave. This is a very fine, but important distinction.
You cannot purchase this coverage directly. The people buying the plans are expecting to use the benefit. So providers only sell personal policies through groups in order to pool risks.
Premium Costs and Benefits
Insurance companies understand that covering normal childbirth is a sure money loser. The benefits paid for normal childbirth is often far greater than the cost of monthly premiums paid in advance.
Input a few variables and get a short term disability quote. The form is designed to calculate the monthly premium rate paid prior to delivery, and compares these rates to the projected benefit paid upon normal childbirth. The ratio of monthly premium cost, compared to the projected benefit explains why these policies require an extra step.
Getting a Policy
Many women look for a private policy because their employer does not offer it. They discover that finding a plan sold direct which covers normal childbirth is like hunting unicorns: neither exists.
However, there is hope! You can get personal short term disability insurance for maternity leave as a voluntary employee benefit. You pay the premium through convenient payroll deduction, so there is no direct cost to your employer. If you leave your company, the policy is portable, and guaranteed renewable. That means no matter where you work or what happens to your health the plan is yours for as long as you continue paying monthly premiums.
Individual Short Term Disability for Pregnancy Bed Rest
Things works differently with individual short term disability insurance for pregnancy bed rest. Unlike normal childbirth, complications of pregnancy are not planned. The chances that the benefit payment will outweigh the monthly premiums are much lower.
The policy is much more likely to be a moneymaker for the insurance company. About twenty-five percent of pregnancies experience one or more complications. Not every person buying a plan will both conceive, and experience complications.
Therefore, people can purchase a contract covering pregnancy complications more easily. Many different providers will sell these policies directly. There is no need to involve your employer in the process.
Individual Short Term Disability Companies
Individual short term disability insurance companies can be broken down into two groups: worksite providers, and personal sales companies.
Plans at worksite
Worksite providers market the policies that cover childbirth. They approach employers and attempt to convince them to offer voluntary programs to their employees. By working through groups, the insurance companies are able to pool risks. By pooling risks, the providers can provide personal plans with richer benefits, at lower monthly rates, and more lenient underwriting.
Worksite policies are both employee paid and privately owned. Since there is no direct cost to employers, this represents a great way to expand benefits, without adding to direct cost. People looking for personal policies covering childbirth should ask their employer to make them available.
Plans sold direct
Individual short term disability companies also sell policies directly. There is no opportunity to pool risks, so adverse selection becomes a challenge. Companies who sell direct must offer policies with restrictions (like normal childbirth), with higher monthly rates, and more restrictive underwriting.
Private plans that cover accidents and illnesses only are simpler to find. You are buying true insurance coverage: accidents and illnesses that are not planned or expected. Many companies offer policies that you can purchase through your local broker.
The biggest advantage of buying direct is convenience and access. Not every employer offers options to its employees. Buying individual short term disability insurance directly may be the only option to protect income for many people.