Disability benefits help new moms protect their paychecks while they focus on their families, Unum says
For more than 40 percent of U.S. mothers, maternity leave is unpaid
CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- When Kayla Shaw had her baby boy earlier this year, she stepped away from work, but not her paycheck, to spend those first months with her newborn. Shaw is one of about 10 percent of working women who enjoy paid maternity leave thanks to short term disability coverage.
"Having short term disability coverage while I was on maternity leave was very helpful for our family," said Shaw, a 28-year-old registered paramedic from Fargo, N.D. "It was a huge relief for our family to know that while I'm home taking care of our new baby boy, we'd be OK financially."
During Disability Insurance Awareness Month in May, the industry focuses on disability coverage for workplace absences from injuries or illnesses. But a significant number of disability claims are for joyous events - the birth of a child.
The U.S. Census Bureau estimates that about 4 million babies are born each year, with two-thirds born to mothers in the workforce. About half of working mothers will have some form of paid maternity leave that may include use of vacation or sick time, but more than 40 percent of new working mothers won't receive paid leave.
Short term disability benefits enable working mothers to enjoy paid leave, but the coverage is only used in about 10 percent of maternity leaves, according to the Census Bureau.
As the leading provider of group disability benefits in the U.S., Unum sees a significant number of maternity claims. Twenty-seven percent of its group short term disability claims are maternity-related. In its voluntary benefits division, 17 percent of short term disability claims are maternity.
Unum's claims experience and benefits research points to some important trends:
- Over the past 10 years, the average age of Unum's maternity customers has increased from 30.4 to just over 31.6. (The national average age of all first-time mothers - working or not - is 25.1 years, as reported by the Centers for Disease Control.)
- Paid leave covered by short term disability averages six to seven weeks. New mothers may take additional unpaid leave as available under the provisions of the Family and Medical Leave Act.
- Only 30 percent of women age 45 and under are enrolled in a short term disability plan at work, according to a survey that Unum recently conducted of America's workforce.
"We see firsthand the importance of this benefit to working women," said David Gilbert, assistant vice president of short term disability for Unum. "But the reality is that most working women aren't protected by short term disability coverage and this can leave them exposed to financial risk as they step away from work to care for a newborn."
When polled in December 2012 by Harris Interactive for Unum's annual workforce study, more than half of working women (53%) below the age of 45 said they were not confident they have enough savings to cover a period of disability.
"As women wait longer to have children, their financial exposure increases because a woman's earnings will likely grow with each passing year," Gilbert said. "Short term disability insurance will help a new mom preserve this income while she's out of work following the birth of a child."
Kayla Shaw is now back at work following her paid leave to care for her son.
"There is always a worrisome feeling when you're not working that your finances will take a hit," Shaw said. "But with my short term disability coverage, I knew I had a safety net. And that feeling of financial security allowed me to make the most of my time with my baby."
Unum is a leading provider of financial protection benefits through the workplace. The disability insurance leader in the U.S. for 37 years, Unum's portfolio of financial protection products also includes life, accident and critical illness, which help protect millions of working people and their families in the event of an illness or injury. In 2012, Unum paid $5.5 billion in benefits to nearly 490,000 individuals and their families.
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