OMAHA, Neb.–As credit unions continue to seek ways to help members financially, the results of a new survey indicate they may want to consider offering education and perhaps even products related to unpaid maternity lead.
In releasing the results of its survey of 1,000 women, Breeze, which describes itself as an insurtech that provides disability insurance, cited U.S. Bureau of Labor Statistics data showing just 17% of all U.S. workers have access to paid maternity or paternity leave. As a result, the vast majority of expectant mothers take unpaid maternity leave; on average, they take 10 weeks.
“That's two and a half months without income at a time when newborn expenses can quickly approach five figures between medical visits, diapers, and formula,” the company said.
How to Get By?
Financially, how do women get by during this time? According to Breeze, respondents to its survey were segmented down two different survey paths based on how they answered the first question: "Prior to your pregnancy, did you take out a short-term disability insurance policy in preparation to go on unpaid maternity leave after eventually giving birth?"
The results: 40% of women answered "yes," 35% answered "no," and 25% opted not to answer.
When the 35% who did not take-out short-term disability insurance prior to their pregnancy and eventual time on unpaid maternity leave were asked, “Why didn't they take out a disability insurance policy?” a plurality of respondents (33%) said they "knew nothing about disability insurance.”
A ‘More Interesting Answer’
But according to Breeze, 21% gave a “more interesting answer,” and it’s an issue on which CUs might want to educate members.
“This group applied for short-term disability insurance after becoming pregnant, only to find out their pregnancy would be counted as a pre-existing condition that couldn't trigger a benefits payout,” Breeze reported.
The analysis added, “Whatever the reason was for not getting short term disability insurance coverage, the lack of replacement income from such a policy had many mothers resorting to more drastic financial measures to cover costs while on unpaid maternity leave.”
Among the findings in the survey related to finances:
- Just 11% of applicable women indicated they budgeted for unpaid maternity leave so they could handle expenses comfortably.
- To make up the income gap, women reported tapping emergency savings (20%), credit card debt (17%), side-jobs (11%), or personal loans (9%).
Additional Findings
When asked to select all financial goals that were negatively impacted by going on unpaid maternity leave without disability insurance, some eye-catching results included:
- 35% delayed paying off other forms of debt
- 34% delayed paying off student loan debt
- 32% delayed buying a home
- 32% delayed building a savings fund
- 29% delayed buying a car
Those Who Took Out Insurance
Meanwhile, of the 40% of expecting mothers who did take-out short-term disability insurance, 65% said it provided them with adequate financial coverage.
Among women who took out a short-term disability insurance before their pregnancy, here’s what the average policy looked like, according to the Breeze survey:
- Average Monthly Premium: $94.07 (Median: $89.00)
- Average Percentage of Monthly Income Replaced: 50.25% (Median: 46.00%)
- Average Benefit Period: 3.38 months (Median: 3.00 months)
The full survey can be found here.