Come May 14, it’s Mother’s Day, and a good time to reflect on the importance of maternity insurance. Starting a family can be an exciting and rewarding experience but can also bring various financial challenges. Pregnancy and newborn care can significantly add to your financial responsibilities — from medical expenses to childcare costs. That’s why it is essential to plan your finances before starting a family, and one of the most crucial aspects of this forethought is maternity insurance.

Why it is necessary

Maternity insurance is a type of health insurance policy that covers medical expenses associated with pregnancy and childbirth. It typically includes coverage for prenatal care, delivery, and postnatal care. Depending on the policy, it may also cover other services, such as lactation consultations and newborn care.

According to statistics, a standard or C-section delivery cost might range from ₹50,000 to ₹70,000. This can go up as high as ₹1 lakh or more, if you happen to live in a metro city. The cost can be very burdensome for the average family when combined with prenatal and postnatal expenses during pregnancy. Additionally, despite being covered by corporate health insurance, the sum does not adequately account for healthcare inflation, with standard or C-section delivery costs rising by 18–20 per cent annually. There are now plans available that offer a coverage of up to ₹2 lakh for maternity.

Choosing maternity benefits in your health insurance protects you and your family from these expenses. Here is all the information you need:

Bear the waiting period in mind

You must consider the waiting period or the period before the policy becomes effective and the coverage starts. It’s important to note that you will not be covered if you are already pregnant. The best time to buy this add-on is when you get married, or while renewing your health insurance plan. The waiting period varies from insurer to insurer, ranging from 9 months to a few years. Fortunately, there are a wide array of plans that have reduced the waiting period for maternity coverage from 2-4 years to 9 months. If you have an existing condition that could complicate your pregnancy, ensure that the policy covers it or offers additional coverage.

Different types of maternity insurance policies

There are two main types of maternity insurance policies: standalone and maternity coverage as part of a health insurance plan.

·   Standalone coverage: This type of insurance is specifically designed to cover medical expenses related to childbirth and is not tied to any other health insurance plan.

·   Maternity coverage with a health insurance plan: Most health insurance policies provide some form of maternity coverage as part of their offerings. However, it is essential to carefully review the policy fine print to ensure that the coverage offered is sufficient for you.

Benefits of maternity Insurance

Many insurance providers have thoughtfully created maternity plans for young couples. For example, some plans offer sum assured ranging from ₹2 lakh to ₹1 crore, with a specific amount designated for maternity-related hospitalisation, legal, medical termination of the pregnancy, vaccinations, ambulance fees, and the cost of the infant from delivery to 30-90 days. In addition, the fact that most insurance carriers offer cashless claim settlement at all network hospitals is a significant advantage. 

Additionally, tax benefits under Section 80D up to ₹25,000 in a single fiscal year are also offered.

Exclusions to watch out for

Most health insurance plans typically do not cover the expense of infertility treatment. However, new-age and evolved health insurance plans have started offering coverage for IVF treatments. The level of coverage varies from insurer and insurer, so ensure that you review the inclusions and exclusions thoroughly.

It’s essential to plan early to ensure that you are financially prepared to start a family. By creating a comprehensive financial plan that includes maternity insurance, you can confidently begin your journey as a parent.

The writer is Joint Group CEO, PB Fintech