In light of the birth of my third child yesterday I posted about the average cost of delivering a baby. As a follow up I thought we should ask this question – should you pay extra for maternity insurance coverage?
It is becoming more common for insurance companies to add maternity as an additional option (called a ‘rider’). For example, you might pay an additional $2,000 per year for maternity coverage.
Photo by Rob Gale
Remember that companies that offer maternity riders plan to recoup their cost because they know those who have the insurance have it because they (obviously) intend to have children. I know Dave Ramsey frequently recommends his listeners not get the maternity coverage, but pay cash for the delivery instead. Here is how you can decide:
- Determine the cost of adding maternity to your insurance.
- Visit your local hospital and ask them what would be the cost of delivery if you prepaid in your second or third trimester. Will the negotiate a discounted rate?
- Consider the option of a Health Savings Account. You can read some good introductory information here.
Now you have the most of the mathematical information, but there are several factors that cannot be numerically quantified.
- How soon do you plan to have children? Remember some couples have difficulty so it could be a lot longer than you plan. On other occasions couples have changes of plans. You might say two years, but it could turn out to be four.
- Are you disciplined enough to save the amount you would have paid if you don’t get the rider? If you can automate the payment to another account you can save the money yourself. If you know you wouldn’t do that well then consider the rider.
- Peace of mind. This is the reason most people get insurance. It provides us with peace in the midst of all those what if questions. What is that worth to you?
- If you have previously had children what was your experience like? Typically those who healthy natural deliveries can expect that to be a pattern for future children.
- Remember you most companies require you to have the rider before (typically 12 months) you have the baby. Biologically this means you need to buy the insurance before you get pregnant.
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