How to Protect When You're Expecting
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A week before my son was born, I spoke at a conference about the "Future of Money". It was the late 90's and the first cyberwallets were raising questions about digital currencies, credit cards and p2p payment systems. As an expert in such things, I was asked to give a short talk. To warm up the crowd I joked that, as an expectant father, the future of my money included "life insurance and good dental plan." It got a polite but unenthusiastic laugh.
A few days later, I had a front row seat for the birth of my son. It was immensely joyous – even now, 20 years later, how it felt to hold him, to smell him, is indescribably wonderful - but it was also an immense relief. Our pregnancy had not been easy for my wife. She had an unexpected complication that placed her life and that of our baby at risk. It was wonderful to see our baby boy and know it was all worth it; to know that it would all be alright.
Whether you're a man or a woman, few experiences in life provoke a razor-like focus on the need to secure your future like having a baby. I've heard it described as taking a part of your heart and moving it outside your body – that feels right. The weight of responsibility and the vulnerability we all feel changes many of us permanently.
For my wife, these feelings were even more intense. Long before our son was real for me, he was very real for her. Her desire to protect him, and her fears for him, started in the earliest days of the pregnancy. But given the pregnancy and the complication, insuring her income would have been quite difficult. This is not uncommon.
While expectant fathers are coveted customers, many expectant mothers struggle to get the life insurance protection they need. This was brought home to me last year through an emotional story of a single mom in New York who shared her experience of trying to get life insurance while she was pregnant. She was healthy. She was highly motivated to secure life insurance. And she was relentless trying to get coverage. But, she had a pregnancy with minor complications and, in the end, she didn't get coverage until many months after the birth of her son. Summing up her frustration, she exclaimed: “They didn’t protect us when we needed it most.”
Her story is just the tip of the iceberg-sized need to do more to protect expectant mothers. There are 4 million pregnancies every year in the US and more than a quarter of all life insurance purchases are motivated by a baby. But access to coverage is not equal for Moms and Dads.
Because pregnancy comes with a host of body changes, the most obvious being weight gain, access to coverage can fall right when the desire for protection spikes. As an industry, we are not doing enough to accommodate Moms who want to buy life insurance. It is unacceptable to advise expectant mothers to come back and apply only after they've given birth, or charge them higher rates permanently based on factors tied to their pregnancy.
These slight differences in access are an example of the small structural ways in which women have unequal opportunities to men in product availability, pricing, quality and, in this case, access across a broad range of financial services. Taken together, each of these small differences can accumulate into huge gaps in their financial security. This can affect job choices, long-term savings strategy, and near-term disposable income. Even if each of the differences is justifiable, the sum of these differences can have an impact that is unacceptable. This is deeply unfair.
It sparked a puzzle for our team – How can we level the playing field?
We have identified two small changes that will give expectant mothers more equal access to life insurance:
- Weight: When we ask for weight in our Life application, we clarify that pregnant women should simply use their pre-pregnancy weight. This ensures that they do not get charged a higher premium for just a temporary weight gain. I think of this as, "Baby rides for free."
- Diabetes: When we ask about diabetes, we ask the type, and list gestational diabetes as an option. We do not raise rates for this condition alone.
This is not to say that there are not greater risks associated with weight gain and gestational diabetes during pregnancy. There is a measurable risk but it is temporary, and we believe that it is inherently part of the risk of being human. We all are born. We all have mothers. Some of us are lucky enough to be mothers. We decided not change our prices for them because it is the right thing to do. We'd like to encourage other carriers to do the same (pm me if you'd like a copy of our analysis).
Pregnancy lies at the core of our humanity. We have an obligation as an industry to care for women at this important and joyous time. In a small way, we're making it easier for Moms to get the insurance they need. We hope others will join us.
If you need help delivering products to meet the needs of Moms (or Dads) please visit us at www.iptiq.com/us