Life insurance on preemies

Pregnancy is one of the most memorable experiences in a woman’s life. It is scary, exciting, uncomfortable and wonderful all at the same time.

However, there are times when for one reason or another, the baby arrives before it is full term. This can lead to many health complications for the baby and mom. This is why we felt the need to dedicate an article to this topic and discuss your options when it comes to life insurance on preemies. In this post, we will answer the question of why have life insurance on a preemie and go over your options.

If you have any questions or would like a personalized review of your situation, just reach out to us. We specialize in finding coverage for children and their families.

Preterm labor in the US vs. around the world

First, we feel that we need to share that according to Preemie Survival, a preterm baby or preemie is a baby born before 37 weeks of pregnancy. A preterm birth will occur in approximately 12% of all pregnancies in the US. Even though CDC research shows a slight decline in preterm birth rates, it still remains one of the leading causes of infant deaths in the United States.

Preterm birth is also a worldwide problem. According to the March of Dimes’ Born too Soon Global map, there are “15 million preterm births each year and rising with about 60% of preterm births occur in sub-Saharan Africa and South Asia. Approximately, 1.1 million babies die from preterm birth complications.”
The report also cites that 15 countries account for two-thirds of the world’s preterm births

1.    India
2.    China
3.    Nigeria
4.    Pakistan
5.    Indonesia
6.    United States of America
7.    Bangladesh
8.    Philippines
9.    Dem. Rep. of Congo
10.  Brazil
11.  Ethiopia
12.  United Republic of Tanzania
13.  Uganda
14.  Sudan
15.  Kenya

Why it is important to have life insurance on preemies

The answer to this question is the same regardless of when the baby was born. You need to have life insurance on a preemie for the same reason you have coverage on yourself: just in case. The thought of purchasing life insurance on our children can be daunting. However, we need to face reality and acknowledge the need for coverage.

Think of it this way: by getting them life insurance now, you ensure that they will have the coverage for the rest of their lives, regardless of their health. This is especially true when it comes to premature babies. Unfortunately, babies born prematurely are more vulnerable and are more likely to have health complications. This makes getting coverage on them even more important.

As parents, we want to ensure that our little ones will have the best head start in life. Having life insurance in place would mean that they won’t have to worry about qualifying for coverage down the line.  There are many reasons why life insurance on preemies makes sense and it is important for us as parents to secure it for them.

Why it may be challenging to get life insurance on preemies

What makes getting life insurance on premature babies a little more challenging is the unknown. There are many complications that can arise when a baby is born early. According to an article, there is a long list of health challenges a premature infant may face:

• Low birth weight
• Breathing problems because of underdeveloped lungs 
• Underdeveloped organs or organ systems 
• Greater risk for life-threatening infections 
• Higher risk for a serious lung condition, known as respiratory distress syndrome 
• Greater risk for cerebral palsy (CP) 
• Greater risk for learning and developmental disabilities

Life insurance companies don’t like it when there are uncertainties. Typically, carriers would like to see a clear health picture, notice patterns and know the condition of the infant prior to approving a policy. If your little one is still under a doctor’s watch for a particular condition, the life insurance company may deny the application. This is why it is essential to discuss your concerns with an insurance advisor. We would be able to take a look at your personal situation and find an option that is best fit your needs.

Your options to get life insurance 

You have several options, depending on the health condition of your baby. Below is just a  summary of the options. For more detailed information, prices, pros and cons of each, you can view our comprehensive guide on life insurance options for children. 

Get an individual policy on your baby –If you select this option, your child will be subject to underwriting. This means that the life insurance company will ask you a series of health questions. The underwriting department would like to know:

• How many weeks was the baby early
• Was your baby ever admitted to the NICU, if yes how long did she or he stay there
• Were there any respiratory problems or any other health concerns and etc.

The life insurance company would like to have all of the information upfront prior to making a decision. Please have all of the doctor’s contact information and any other medical records on your child available to speed up the process.

Get a rider on your life policy – a rider basically is an added feature onto a life insurance policy. It allows you to “customize” it to fit your particular needs. There are 2 big advantages to this option: price and some companies do not underwrite the children. Based on your baby’s health, this may be the only option for your family to get life insurance on your little one.

This option has its negatives. The biggest one is that, even though there might not underwriting done on the baby, it will be done on the parent or parents, if both are applying.

Coverage through work – If your employer offers life insurance coverage, our advice is: take it. It is one of the most affordable ways to secure life insurance protection. However, do not count solely on it. There are many instances when this insurance can come short and leave your family without the financial protection that they might need.

Contact your Human Resource Department and see when the open enrollment period is. See if you are able to add your children to the policy and if there will be any underwriting done on them. Another key thing to look out for is what will happen to the policy once you are no longer working for the company. Typically, companies will allow you to keep a portion of the entire policy and “take it with you”. The downfall is that you will be going from a group rate to an individual and the price will increase.

In conclusion,

When it comes to securing life insurance on preemies, there is a lot to consider. Your options are based on the condition of your little one. Please reach out to us and let us help you find a route that fits your needs and budget.