Yes! It is an important part of a couple’s risk management plan. I will share more in this article about maternity plans, the risk of not getting it (with a real-life example from one of my clients), and how to choose a maternity plan.
What does maternity insurance cover?
Maternity insurance (also known as pregnancy insurance or prenatal insurance) covers some complications that can arise during pregnancy and delivery. It also provides some congenital cover for the baby.
Some maternity plans can be bought as a standalone plan; most maternity plans come bundled with a whole-life or investment-linked plan that can be transferred to your baby once he or she is born, with no health underwriting required. Two maternity plans in particular extends this guaranteed insurability benefit to a hospitalization plan!
Maternity insurance can generally be bought when you are at weeks 13 – 36 of your pregnancy.
Here are some of the commonly covered conditions in maternity plans:
Pregnancy complications for Mother:
- Abruptio Placentae
- Amniotic Fluid Embolism
- Choriocarcinoma and Malignant Hydatidiform Mole
- Desseminated Intravascular Coagulation
- Fatty Liver of Pregnancy
- Gestational Diabetes Mellitus Resulting in Foetal Macrosomia and Neonatal Hypoglycaemia
- HELLP Syndrome
- Miscarriage due to Accident
- Placenta Increta or Percreta
- Postpartum Haemorrhage requiring Hysterectomy
- Pre-Eclampsia with severe features or Eclampsia
- Still Birth
- Uterine Rupture
- Vasa Previa
Congenital illnesses for Baby:
- Absence of Two Limbs
- Anal Atresia
- Atrial Septal Defect
- Biliary Atresia
- Cerebral Palsy
- Cleft Palate or Cleft Lip
- Club Foot
- Coarctation of the Aorta
- Congenital Blindness
- Congenital Cataract
- Congenital Deafness
- Congenital Diaphragmatic Hernia
- Congenital Dislocation of Hip
- Congenital Hypertrophic Pyloric Stenosis
- Development Dysplasia of the Hip
- Down’s Syndrome
- Infantile Hydrocephalus
- Patent Ductus Arteriosus
- Retinopathy of Prematurity
- Spina Bifida
- Tetralogy Fallot
- Trancheo-Esophageal Fistula or Esophageal Atresia
- Transposition of Great Vessel
- Truncus Arteriosis
- Ventricular Septal Defect
Limited Sum Assured of Maternity Insurance
Even though maternity insurance covers many pregnancy related complications and congenital conditions, the sum assured is really small (generally only up to a maximum $30,000). In the event of complications or surgeries, the hospital bills can easily surpass this amount.
Why then should we consider Maternity insurance?
I used to be quite ambivalent about pregnancy insurance, because the cover amount is quite limited. However my perception changed when I was pregnant. I worried a lot about my baby before he was born (I am sure you feel the same!). Even if the scans showed that my baby is healthy, I worried about my baby being born with health conditions that were not detectable on the scans.
With maternity insurance, for just a small premium, I am able to guarantee the insurability of my child even if my child is born with any congenital issue. My child’s congenital or pre-existing conditions will not be covered, but at least he is guaranteed to get insured and this guarantee is priceless. Insurers may not want to insure a baby at all if the congenital condition is serious, without this guaranteed insurability. Think about all the future hospital bills if we can’t get any insurance for our babies!
Therefore, even though the sum assured of maternity plans itself is low, we should focus on the guaranteed Critical Illness (“CI”) cover of up to $300K (when we add a CI rider to the Whole-Life Plan), and the guaranteed Hospitalization cover for our unborn child that comes with the maternity insurance.
In the case of my client, she was referred to me after having a baby boy with albinism (which was not detectable on scans). She experienced a lot of rejections trying to get Whole-Life with CI plan for her son. In fact out of all the insurers we applied to (and we applied to A LOT), only one was willing to cover her son, with exclusions of course.
We were unfortunately unable to get her son covered with any local hospitalization plans, because hospitalization plans usually have stricter underwriting.
Ok, But I think the Risk of My Baby Being Born with Health Conditions is Low
We use insurance to cover the financial impact of a health risk happening to us. Risk, is defined as the probability of an event happening and the impact or consequence when it happens:
Risk = Probability x Impact
Insurance is useful for a low probability, high impact health event that has the capability to cause us financial hardships (insurers are unlikely to cover a high probability, high impact event!).
When people deem maternity insurance as optional, they are probably focusing on just the probability of it happening. However, when we factor in the consequence of our child being unable to get covered for any CI or health insurance, the risk becomes significant!
How do We Select Our Maternity Plan?
Do we compare the number of conditions covered or do we compare which plan has the cheapest premium?
There is a comparison table floating around the internet and mummies’ group chats that details the conditions covered by different maternity plans and their premiums. While that table is informative, I wouldn’t use it to base my decision. Because, at the end of the day, whether Insurer A or B covers more conditions, the cover is still limited to $5,000 to maximum $30,000, depending on what you choose.
Instead, we should be looking at which maternity insurance allows our babies to apply for more plans without needing health underwriting. The financial impact of this guaranteed insurability benefit far outweighs the limited cover in sum assured and the conditions provided by the maternity plans.
Currently the guaranteed insurability benefit for both whole-life with CI and hospitalisation plan (government A class ward entitlement) is offered by only two maternity plans that we know of. The rest of the maternity plans provides this guaranteed insurability benefit to only Whole-Life or Investment-linked plans.
Conclusion
Maternity insurance should form part of the risk management plan for a couple, to safeguard the insurability of their unborn child. This is because in the event their baby is unable to get any CI and hospitalization cover and falls gravely ill in the future, the large medical bills can cause long term financial hardships to the family.
Of course, we wish our children good health! We hope we never have to use insurance. But that’s the point about insurance, be of no use when we are healthy and great use when we are not 🙂
If you would like to have a discussion about maternity plans or if you have concerns about maternity plans because you are having multiple births or conceiving through IVF, do not hesitate to reach out to me at the contact box below.
Congratulations on your little bundle of joy joining your family! A child is truly a blessing to the family 🙂
Sow Wei Ting is an Authorised Representative of IPP Financial Advisers Pte Ltd. The views expressed here are solely those of the author in her private capacity and are not associated to the author’s employer, organisation, committee, or other groups or individual.”
Disclaimers
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Maternity insurance plans are subject to terms and conditions of individual insurers who offer such plans.