Pregnancy, a Planned Resignation and a Maternity Waiting Period
Ms. Kavya Rao, 29, a software engineer, is covered by her employer's group health policy: ₹5,00,000 per employee, maternity sub-limit ₹50,000, a nine-month maternity waiting period, and cover that ends on the day she leaves the company. She is 20 weeks pregnant; the baby is due in early October. She plans to resign in June to relocate, and before that to buy an individual policy carrying a maternity benefit: ₹10,00,000 sum insured, maternity limit ₹75,000, a 24-month maternity waiting period, a 30-day initial waiting period and the usual pre-existing-disease terms. She asks three things: whether the individual policy will pay for this delivery, whether she should resign at all, and whether her group coverage 'carries over' so the maternity waiting period counts as served. She also wants to know how the baby will be covered after birth.
1. Will the individual policy pay for the October delivery? Give the reasons in order.
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No. Three independent reasons, any one of which is fatal:
- Maternity waiting period. The product imposes 24 months. Bought in June, the policy would be about four months old at delivery, so the maternity benefit is not yet available.
- The pregnancy pre-dates inception. A pregnancy already in progress when the policy starts is generally treated as a pre-existing condition or is expressly excluded, because the insurer did not underwrite the risk. Even a policy generously granting credit for group service does not normally buy a pregnancy that was already underway.
- Initial waiting period. Only 30 days, but worth confirming that the delivery is not in the first month - it is not, so this point is secondary.
What the individual policy will do is cover her from day one for unrelated illness and accidents after the initial waiting period, and it builds the 24-month maternity clock for a future pregnancy. That is a legitimate reason to buy it - but she must not be allowed to buy it believing it covers this delivery. Say so in writing.
The corollary: the only cover that can respond to the October delivery is the employer's group policy, and only if she is still an employee at that time.
2. She asks whether she can resign in June and still have the group maternity limit pay in October, and whether the maternity waiting period 'carries over' on portability to the individual policy.
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Resignation. Group cover ends when employment ends - typically the last day of employment or the end of the month, depending on the master policy. If she resigns in June, she is uninsured in October and the ₹50,000 maternity sub-limit is lost. There is no COBRA-style continuation right in Indian group health cover, though some employers allow a short extension or conversion; she must ask HR in writing rather than assume. The clean option is to stay employed until after the delivery and the maternity claim is settled, then resign.
Carry-over. Distinguish two things:
- Pre-existing disease waiting period - group-to-individual portability normally gives credit for continuous coverage served, because the insured is not a new risk.
- Maternity benefit waiting period - this is a benefit-specific wait, not a pre-existing-disease wait, and products commonly do not credit it. Even where credit is offered, an existing pregnancy remains a pre-inception condition.
So she must not plan around carry-over. Ask the intended insurer to confirm in writing both the maternity credit position and the treatment of the current pregnancy before any proposal is submitted and before any resignation letter is signed.
3. What must she disclose on the individual proposal, and how should the newborn be handled?
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Disclosure. The pregnancy is a material fact and must be declared, along with the expected date of delivery and her obstetric history. Concealing it to 'keep options open' is the worst possible trade: the insurer will see the delivery date against the policy inception date on any maternity or newborn claim, and within the moratorium it can repudiate for non-disclosure and cancel the policy. She would pay two years of premium for a benefit that cannot respond, and risk the entire contract. Explain this plainly and record the conversation.
The newborn. Handling depends on the product and on whether maternity benefit is in force:
- Where the policy has an active maternity benefit, many wordings cover the newborn from day one up to the sum insured, provided the insurer is notified within the period the wording specifies and the required documents are filed.
- Where maternity is still in its waiting period, or the product does not extend automatic cover, the baby must be added by endorsement or at renewal, usually with underwriting.
- Check congenital-condition exclusions and any per-child sub-limit before promising cover.
Practical plan. Buy the individual policy now with honest disclosure so the 24-month clock and the child's future cover start early; do not resign before the delivery; keep the group policy alive through October; notify the insurer of the birth promptly and get the endorsement confirming the baby's cover.