Life Insurance and Pregnancy, What to Expect

If you are planning to have a child in Canada, you need life insurance more than ever. Learn more in the Dundas Life blog.

April 1, 2021

If you are pregnant (or planning to start a family soon), it is about time you took out life insurance. As your family grows, so do your insurance needs. If something were to happen to you, Life insurance will protect your family financially. Here are a few things to consider when shopping around for life insurance after having a child in Canada.

Can I get approved for life insurance if I am having a child in Canada?

Pregnant woman sitting beside two women

Yes, you can! In fact, buying life insurance coverage during pregnancy is very common.

As long as your pregnancy is progressing normally, it will not affect your health rating. This is particularly true if you apply early into your pregnancy.

While you may experience a lot of physical changes during pregnancy, most will not have any long-term health effects. As a result, insurers are able to offer you standard rates.

As a side note, the life insurance medical exam does not include a pregnancy test. The examiner will ask you if you are expecting a baby and, of course, you must answer truthfully.

Your pregnancy by itself does not impact your health rating. Instead, it is the potential health complications related to pregnancy that could affect your rates.

Normal health changes that will not affect approval

When you are applying for coverage, you are generally required to take a medical exam. From your test results, your insurer will determine your insurability and premiums. This exam is similar to a routine health check-up, requiring a blood and urine sample. Your blood pressure and pulse will also be measured. Furthermore, the technician will use your weight and height to calculate your body mass index.

If you are pregnant, you may be worried about how pregnancy-related changes will affect your test results. Fortunately, if your pregnancy is progressing normally, it will have no bearing on your ability to get life insurance coverage.

Here is the list of health changes that insurers usually consider normal during pregnancy.

Weight Gain

We get it. When you are pregnant, you gain weight. This is not something you should worry about when applying for coverage. Insurance companies make adjustments for normal weight gained during pregnancy.

As long as your weight gain is within the normal range, it will not affect your insurability. To help underwriters get a clear idea about how much weight you have put on, be ready to share your pre-pregnancy weight.

Blood Composition

Blood composition changes in pregnancy. It is normal to record higher cholesterol levels and lower levels of protein and globulin. You are also likely to see a drop in your iron and hemoglobin levels as well.

Unless you had any of these issues before pregnancy, your insurance company will view these bodily changes as normal. Consequently, they will not impact your health rating.

Innocent Heart Murmur

During pregnancy, a woman’s body makes more blood. The excess blood flowing through the heart can cause murmurs. These heart murmurs are harmless and typically go away after pregnancy. So they are rightly called “innocent heart murmurs”.

Insurers consider innocent heart murmurs as normal changes during pregnancy. This means they will not affect your chances of getting coverage.

Pregnancy conditions that might postpone approval

Some pregnancy-related conditions may temporarily affect your insurability. If you have any of these, most insurers will postpone offering you a life insurance policy, until after you have given birth.

Here are some conditions that may deter life insurance companies from insuring you during pregnancy:

Gestational Diabetes

Gestational diabetes is diabetes that occurs during pregnancy. It is a short-term condition but can put you at a higher risk for several health conditions. These include premature delivery, miscarriage, and pre-eclampsia, among others. The good news is gestational diabetes generally goes away after childbirth. However, it does increase your chances of developing diabetes later on in life.

Most insurers will not issue a policy to a pregnant woman with gestational diabetes. Instead, they are likely to postpone offering converge until a few weeks post-delivery.

Pre-eclampsia

Pre-eclampsia is characterized by high blood pressure and protein in your pregnancy. It is a potentially dangerous condition for both the mother and the baby. If you develop this condition during pregnancy, insurers will put your application on hold until you have had the baby.

Do I need to tell my life insurance company if I am having a child in Canada?

Pregnant women who are shopping around for a life insurance policy must tell the insurers they are having a child. As we mentioned earlier, your medical test does not include a pregnancy test, but the medical examiner will ask you if you are pregnant. Needless to say, you should answer all the questions on your application honestly.

Lying on your application is considered life insurance fraud. Consequently, the insurer can reduce the death benefit or deny the claim altogether should you die.

However, if you conceive and already have life insurance, you do not have to let your insurance carrier know.

When to apply for life insurance if you are having a child in Canada?

Person documenting their insurance application

The sooner into your pregnancy you apply, the better. Applying early gives you the best chance to receive low rates. But you can shop for coverage anytime before, during or after it.

Before Pregnancy

If you are planning to have a child in the near future, you may want to consider buying coverage before becoming pregnant. Since life insurance increases by 8% to 10% on average for every year of age, you will benefit from locking in low rates now that last you several decades.

Buying coverage before pregnancy helps you receive the best rates. It also ensures your family will be provided for should you die due to pregnancy-related complications.

During Pregnancy

If you are pregnant and want coverage, the sooner into your pregnancy you apply, the better your chances of getting affordable rates. Most insurers will either increase your premiums or postpone your application if you are close to childbirth.

If you received higher rates owing to pregnancy-related complications, you may be able to retake the medical test one or two years down the line. If the new test results are better than the previous one, the insurer will adjust your rates. (If they are not, your premiums will remain unchanged.)

After Pregnancy

If you could not get a life insurance policy during pregnancy, the best time to reapply is 30-40 days after childbirth. By this time, you will likely lose some of the weight you gained during pregnancy. Also, by now complications related to pregnancy, like high cholesterol, should be resolved.

That said, gestational diabetes and postpartum depression can increase your rates for the next few years. An independent life insurance broker, like Dundas Life, can help you find a provider that is more accommodating with such diagnoses.

Planning to be a stay-at-home parent? You should still consider coverage

Many people think that only the family’s primary-earner needs life insurance. That, however, is not the case. The death of a stay-at-home parent is not only equally devastating but also impacts the family financially. Consider the services the stay-at-home parent provides for free. Should they be no longer there, the surviving spouse will have to pay for daycare, hire a caretaker, or take time off work.

This is where a life insurance policy for a stay-at-home parent can come in. It provides the surviving spouse with money to cover all jobs that the stay-at-home parent provided for free.

Which brings us to another question — how much coverage should a stay-at-home parent get?

There is no single, objective answer to this question because every family is unique. The general rule of thumb is to get to a 15- to 20-year policy with enough death benefit to cover childcare and housekeeping costs. A 15- to 20-year term policy is usually satisfactory because by this time your children will be fully grown.

Should you name your child as a life insurance beneficiary in Canada?

You can name a minor as a beneficiary, but it is not advisable.

Should you pass away while your child is underage, a court will place the money in a trust. The court will also appoint someone to take care of the funds for your child until they are of age. This process could involve unnecessary legal costs. Plus, the funds may be placed in the care of someone whom you may not have wanted in that position.

The best way to make sure the payout benefits your kid is to name your spouse or partner as the policy beneficiary. Alternatively, you can appoint a legal guardian for your child and name them as a beneficiary. Another option is to create a trust and name it as your policy beneficiary. The custodian of the trust, appointed by you, will hold on to the funds until your child reaches the age of maturity.

Conclusion

If you are planning to have a child in Canada, you need life insurance more than ever. If you are pregnant and did not get coverage earlier, you can buy a policy now. By applying early into your pregnancy, you can expect the same or a similar health rating as before. If you are closer to childbirth or have developed a pregnancy-related complication, you may have to wait until after childbirth. Whatever your situation, you can count on Dundas Life to help you find the right coverage at the right price.

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