Life Insurance And Stillbirth: What Coverage Is Offered?

Losing a child is a tragic experience that leaves a permanent stain on a parent's heart. Besides the emotional turmoil, the financial burden of stillbirths often goes unnoticed. The economic strain is further exacerbated by the need to make immediate decisions about the child's burial, coupled with steep bills for delivery and hospital stays. While life insurance rarely covers the cost of stillbirths, there are alternative sources of financial support available to assist bereaved parents during this challenging time.

Maternity leave and pay

In the US, the Family and Medical Leave Act of 1993 (FMLA) provides 12 weeks of unpaid leave annually for parents of newborn or newly adopted children if they work for a company with 50 or more employees. This was updated in 2020 to include caregivers of sick family members, or a partner in direct relation to the birth of a child and thus responsible for the mother's care. However, this only applies to around 60% of American employees, and it is worth noting that the US does not have a federal paid maternity and family leave act.

Some states have supplemented these federal regulations and provided more extensive maternity leave benefits, including:

• California
• New Jersey
• New York
• Oregon
• Rhode Island
• Connecticut
• Hawaii
• Massachusetts
• New Mexico
• Washington
• Colorado
• Delaware
• Maryland
• Puerto Rico
• District of Columbia

These states have enacted laws requiring paid family and medical leave laws beyond the basic federal laws. For example, in 2016, New York passed paid family leave legislation, which includes maternity leave, starting with 8 weeks and 50% of pay in 2018, and reaching 12 weeks and 67% of pay in 2021. Oregon's new parental leave law, set to be put in place in 2023, promises paid leave following births as well as the ability to be granted an additional 12 weeks of paid leave if there are complications with the mother or child's health following the birth.

In the US military, maternity leave is granted for six to eighteen weeks for the Navy and Marine Corps. All other branches offer ten days, in addition to twelve weeks of paid maternity leave.

In the UK, if your baby was stillborn after 24 completed weeks of pregnancy, you might be entitled to financial support. You are entitled to a total of 52 weeks' leave, and you may qualify for Statutory Maternity Pay while off work for a maximum of 39 weeks, providing you have been working for long enough.

Parental bereavement leave and pay

In the UK, the Parental Bereavement (Leave and Pay) Act 2018 provides employed parents who have lost a child under the age of 18 or suffered a stillbirth after 24 weeks of pregnancy with a legal right to two weeks' leave. This leave can be taken as a single block or as two separate blocks of one week. This law came into effect on 6 April 2020.

Parents with 26 weeks of continuous service will be entitled to two weeks of paid leave at the statutory rate, while other employees will be entitled to unpaid leave. The statutory rate for bereavement pay is set at £172.48 per week for the 2023/24 tax year or 90% of the employee's average weekly earnings, whichever is lower. To qualify for the statutory rate, employees must earn at least £123 per week. Employers may offer enhanced bereavement pay; this information can be found in the employee handbook or contract.

In addition to the two weeks of bereavement leave, parents are also entitled to 52 weeks of maternity or paternity leave. If an employee is not on maternity or paternity leave but is unable to return to work for medical reasons, they may be eligible for Statutory Sick Pay for up to 28 weeks, or longer if their contract allows.

Parents seeking work after a stillbirth will be placed in the no work-related requirements group for 15 weeks following the date of birth when claiming Universal Credit.

Child benefit

If you have experienced stillbirth, you may be entitled to financial support to help you through this difficult time. Here is some information on child benefits that you may be eligible for:

• Statutory Parental Bereavement Leave: If you are employed in England, Scotland, or Wales, you are entitled to 56 weeks of Parental Bereavement Leave, which can be taken on top of any maternity or paternity leave. You can choose to take this leave in one block or as two separate blocks of one week each. You must notify your employer before taking this leave.
• Statutory Bereavement Pay: If you are an employee or worker, you may be entitled to two weeks of Statutory Bereavement Pay, which is either £172.48 per week or 90% of your average weekly earnings, whichever is lower. To be eligible, you need to have earned at least £123 per week in the 2023/24 tax year.
• Maternity Pay and Leave: You are entitled to a total of 52 weeks of maternity leave. If you don't qualify for Statutory Maternity Pay, you may be able to claim Maternity Allowance from the government or Employment and Support Allowance.
• Universal Credit: If you have experienced stillbirth and are seeking work, you will be placed in the no work-related requirements group for 15 weeks following the date of birth. You will need to provide a copy of your stillbirth certificate, name, address, and National Insurance number to your work coach.
• Free Prescriptions and NHS Dental Treatment: In England, you are entitled to free prescriptions for at least 12 months after stillbirth. In Scotland, Wales, and Northern Ireland, prescriptions are free for everyone. You are also entitled to free NHS dental treatment for a certain period.
• Children's Funeral Fund: If you are a legal resident of England, you can apply to the Children's Funeral Fund to help cover the costs of burial or cremation for a baby stillborn after the 24th week of pregnancy. This fund is not means-tested, and you can claim financial support directly or through a funeral director.
• Funeral Expenses Payment: If you live in England or Wales and are receiving certain benefits, you can apply for up to £1,000 in Funeral Expenses Payment to help cover reasonable funeral costs.
• Other Financial Support: There may be additional financial support available, such as the Sure Start Maternity Grant if you are on a low income. You can also contact Sands, a stillbirth and neonatal death charity, for practical and emotional support.

Funeral costs

Losing a child is a tragic experience that can be made even more difficult when financial stressors come into play. Here is some information on funeral costs and how to cover them in the event of a stillbirth:

The financial burden of stillbirth often goes unnoticed, with costs for delivery, hospital stays, and funeral arrangements adding up quickly. In addition to the emotional toll, parents must also deal with important financial decisions during what is already an incredibly difficult time.

Funeral director fees typically start at £1,000, and memorials can easily cost upwards of £2,000. These costs can be covered in several ways, including insurance payouts, government support, and charitable contributions. Here are some options to consider:

• Life Insurance: While life insurance typically only pays out for the death of an insured adult, some policies do cover children. However, most life insurance companies only cover children who are between 14 days and 18 years old. It is important to carefully review the terms of your life insurance policy to determine if your stillborn child is covered.
• Critical Illness Cover: Most critical illness cover policies will payout if the insured person's child becomes ill or dies. This can provide much-needed financial support during a difficult time. Check with your insurance provider to see if children's funeral cover is included in your policy.
• Government Support: The government offers several schemes to help with the costs of a child's funeral. The Children's Funeral Fund in England is available to legal residents and covers the costs of burial or cremation for a baby stillborn after the 24th week of pregnancy. Similar funds are also available in Wales, Scotland, and Northern Ireland. Additionally, the Funeral Expenses Payment in England and Wales provides extra support towards burial fees, cremation fees, and other related costs.
• Charitable Contributions: There are charities and organizations dedicated to supporting families who have experienced a stillbirth. For example, Savannah Smiles, an organization that provides $500 toward funeral/burial expenses after a stillbirth.

While dealing with the financial aspects of a stillbirth can be overwhelming, it is important to know that you are not alone. There are resources and support systems available to help you through this difficult time.

Compassionate leave

If your baby is stillborn before the end of the 24th week of pregnancy, it is treated as a miscarriage, and you cannot qualify for maternity leave or pay. However, you can ask your employer if they provide compassionate leave, or you could ask to take annual leave or agree on a period of unpaid leave. You are also entitled to take sick leave if you are not well enough to work and should follow your employer's sickness reporting procedures. There is no time limit on sickness absence following a miscarriage.

If your baby is stillborn after the 24th week of pregnancy, you are entitled to up to 52 weeks of statutory maternity leave. If you are not ready to return to work after maternity leave, you can ask your employer for more time off work. You are also entitled to take sick leave if you are not well enough to return to work after maternity leave.

Frequently asked questions