Parental leave and implications for disability insurance

Insurance advisors recommend you review your insurance portfolio any time you experience a major life change, and becoming a parent definitely counts. You may be unaware that this major change can also impact your disability insurance. Here are some considerations to keep in mind as you plan and return from your parental leave.

During pregnancy: You may be able to claim a disability benefit if you experience complications of pregnancy that affect your ability to work or if you deliver a baby via cesarean section. These types of claims are available for people who are insured through the government-funded Physicians’ Disability Insurance (PDI). If you experience complications that affect your ability to work for more than 14 days, you may claim disability benefits from that time until you give birth. Complications of pregnancy are covered under most disability policies, including professional expense insurance plans, but the longer waiting periods (90 days is most common in the insurance industry) often mean that many complications of pregnancy don’t qualify for claim. If you give birth via C-section, PDI pays a 6-week recovery benefit.

For parents of a newly born or newly placed adoptive child: If you have professional expense insurance through Doctors of BC, you may be able to make a claim for part of your overhead expenses to be covered through the parental leave benefit built into the coverage. This allows for reimbursement of any ongoing business expenses up to the lesser of 50% of your benefit or the current maximum Employment Insurance benefit. You can claim for up to 17 weeks following delivery or date of placement.

When you’re returning to work post-parental leave: If you rely on PDI for a significant part of your disability insurance strategy, speak with an insurance advisor to determine if you should make adjustments to your insurance. PDI is calculated on actual billings or income earned in BC, so if you are planning to return to work in a part-time capacity, your PDI benefit may reduce (due to lower income). Depending on your income and the amount of coverage you have in place, this may result in a period of being underinsured.

Please get in touch with us if you have questions (econnors@doctorsofbc.ca). Doctors of BC licensed insurance advisors are available to give personalized advice; the above describes general features of the plan that aren’t applicable in every situation.
—Erin Connors
Advisory Services Manager, Members’ Products and Services