Covering multiple births: Insurance times two – or three or four
When couples learn they’re pregnant with multiples, their reactions can range from elation to anxiety — or both. Before they start caring for two, four or more, it’s imperative that Mom and Dad review their insurance policies to ensure adequate coverage for their expanding family.
Soon after giving birth to her triplets, Alicia Crowther and her husband, Anthony, knew they needed to rethink their coverage.
“We got to thinking, ‘There is no way one of us could be the sole person responsible for these kids’ care,” says Crowther, who lives in Nevada. She says Anthony’s high-risk construction job spurred their decision to buy a life insurance policy.
“When parents of multiples learn about what they’re having, they’re so overwhelmed that they freeze,” says Katheigh Degan who co-owns a MassMutual office in Kansas City, Mo., with her twin sister, Raleigh Lang. “It is important they break the situation down into something that is manageable and take action.”
Degan points out that contrary to what most may think, the amount of insurance someone needs isn’t proportionate to the number of children – such as double for twins or triple for triplets. For instance, she says parents of twins require between 25 percent and 50 percent more life insurance than parents of a single child do.
Health insurance premiums typically don’t increase solely because a pregnant woman learns she is carrying more than one baby. However, parents of multiples often report maddening experiences with the claims process. It’s not uncommon for health insurance companies to reject claims submitted on the same day by a family with two or more children sharing the same birthdate. Claims for routine checkups and vaccines are notoriously difficult to process.
How can you avoid this snafu? Inform your insurance carrier before the babies are born that you’re about to give birth to multiples. Of course, you’ll want to make sure your health insurance is adequate enough to cover your little ones once they’re delivered.
“When (my kids) were little, the dentist’s office would go crazy,” says Moschel Kadokura, a mother of triplets who lives in Cupertino, Calif. “Every time they went in for a checkup, the dental insurance would reject two of them.”
When it comes to home insurance, consider increasing your coverage for home-based accidents involving visitors to your home, says Lisa Lobo, vice president of underwriting for The Hartford.
“There may be more traffic in and out of your home with extra helpers and visitors and, therefore, an increased potential for trips and falls by people unfamiliar with your home,” Lobo says.
She suggests checking the limit of liability under your current homeowner’s policy and look into the possibility of getting an umbrella policy that protects against catastrophic lawsuits. A $1 million umbrella policy from The Hartford would cost about $225 a year.
Also, if adding to your family requires a home addition or other home improvements, be sure to increase your home’s replacement value, Lobo says.
Auto insurance can involve unexpected expenses. Having multiples can mean buying a bigger car to accommodate the growing number of passengers and baby car seats. Most insurance policies cover the replacement of car seats, so that can result in higher costs for the insurance company when it comes to families with multiples, says Joel Ohman, a financial planner in Tampa, Fla.
“Twins or triplets may not directly cause an increase in car insurance premiums, but they may result in a slightly higher rate,” he says.
Many parents are aghast to learn how much it costs to insure their 16-year-old drivers. Now multiply that figure times three or more.
Kadokura, the California mother of triplets, found a way to cut costs when her children went off to college. Her children didn’t own or drive cars while they were at school, so the family switched to a restrictive driving policy that covered each of children for 30 days a year — enough for when they were at home and driving during school breaks. The bonus of maintaining this minimal coverage is that when the Kadokura children graduate and need full insurance again, they’ll be eligible for lower rates for continued coverage.