Just 19% of US workers have access to paid family leave through their employers.
The number doesn't lie: The vast majority of women employees face unpaid maternity leave should they choose to start a family.
10 weeks without income is a financial gauntlet for even the most prepared of parents.
How do mothers manage?
To get a better idea, we surveyed 1,001 employed women between the ages of 18 and 44.
74% wouldn't have any cash savings left after 8 weeks of unpaid maternity leave. 54% would consider a personal loan to cover costs, while 49% might dip into their retirement account.
In a hypothetical situation to highlight the value of offering a paid maternity leave benefit, 47% would take a 5% pay cut if their employer offered 8 weeks of paid maternity leave.
The kicker to all this?
Short-term disability insurance could help eliminate the financial stress that comes with unpaid maternity leave.
Yet, most women either haven't heard of this product or don't know how it works.
More on that in the analysis. Click here to jump to the full survey results.
After 8 weeks of unpaid maternity leave, 3-in-4 women would have no savings left
Note: If you'd like to see the raw data or data broken down by state, race, age, etc., please email me at [email protected]
When 1,001 employed women ages 18 to 44 rated the financial setback from 8 weeks of unpaid maternity leave on a scale from 1 (no setback) to 10 (major, possibly permanent setback), the average answer was 7.
The plurality (highest percentage of respondents) answered with 10.
Looking further into how 8 weeks of unpaid maternity leave could impact personal finances, here's what we found:
If our female poll participants had to go on unpaid maternity leave for 8 weeks...
- 56% would consider taking on an uncomfortable amount of credit card debt to cover expenses
- 54% would consider taking out a personal loan
- 54% would consider drawing from a more-active daily investment account
- 49% would consider drawing from a retirement account
It's clear most working women are bearish when it comes to the financial situation they'd expect after 8 weeks of unpaid maternity leave.
The data also highlights how valuable a paid maternity leave benefit would be for so many women who otherwise have to deplete savings or take on debt.
This benefit is rare amongst US employers.
But, the companies that do offer paid maternity leave have a major edge when it comes to hiring and retaining the best talent.
The value of offering paid maternity leave
On a scale from 1 (least important) to 10 (most important), respondents rated how important it is that their employer offers paid maternity leave as an employee benefit.
Some interesting results were produced when a hypothetical paid maternity leave benefit was weighed against other common employee benefits.
It's important to note the following data is not meant to suggest employers can cut one benefit in exchange for paid maternity leave. We're not suggesting companies cut health insurance or cut pay, but rather trying to highlight the value of offering paid maternity leave by weighing it against other standard, relatable benefits.
If an employer's financial situation allows them to supplement important benefits like health or dental insurance with paid maternity leave, then they have a great opportunity to differentiate themselves and attract/retain the best talent.
More importantly, they have an opportunity to drastically improve employee happiness and quality of life.
These are the points we are trying to address and quantify by weighing paid maternity leave against other benefits.
We asked 1,001 employed women ages 18-44 what they would give up in exchange for their employer offering 8 weeks of paid maternity leave.
Here's how they answered:
- 47% would take a 5% pay cut
- 20% would take a 10% pay cut
- 15% would give up health insurance
- 30% would give up vision insurance
- 22% would give up dental insurance
- 22% would give up 25% of their PTO
- 6% would give up 50% of their PTO
- 10% would give up their 401(k) or other retirement plan
- 38% would work an extra 10 hours per week
On a scale from 1 (no setback) to 10 (major, possibly permanent setback), respondents also rated the career setback they'd experience after 8 weeks of maternity leave.
The average answer was 5, while the plurality (16%) answered with 6.
Short-term disability insurance: the untapped solution
The kicker to this data is that there is a potential solution to the financial struggles and stress brought on by pregnancy and unpaid maternity leave.
Short-term disability insurance.
However, there are hurdles when it comes to consumer education.
When we asked respondents if they've considered taking out short-term disability insurance to protect their finances against unpaid maternity leave...
- 38% have considered it
- 62% have not
Amongst those that haven't considered short-term disability insurance...
- 58% said they know what it is
- 42% said they do not know what it is
For those that don't know what short-term disability insurance is, we provided a product definition and then asked if they would consider purchasing coverage...
- 82% would consider purchasing coverage
- 19% would not consider purchasing coverage
Circling back to respondents who either have considered disability insurance or haven't considered it but know what the product is, we posed a little trivia:
Unfortunately, this product specification frequently leads to expecting mothers not getting coverage for pregnancy and unpaid maternity leave. Short-term disability insurance must be taken out before pregnancy to cover pregnancy; it will almost always be counted as a pre-existing condition if taken out during pregnancy.
If taken out in preparation for pregnancy and unpaid maternity leave, short-term disability insurance could provide an excellent financial safety net for expecting mothers. It can replace up to 60% of a policyholder's regular income if they can't work and earn a paycheck due to physical injury, medical illness, mental health struggles, or pregnancy.
LIMRA actually found pregnancy is the most commonly-cited reason for short-term disability insurance claims.
Instead of turning to credit card debt or a retirement nest egg during unpaid maternity leave, mothers can instead likely use short-term disability insurance benefits to cover expenses from diapers to baby formula.
Short-term disability insurance is often a better option for unpaid maternity leave compared to FMLA, which is an unpaid federal benefit.
With a bit more consumer education, short-term disability insurance can be an effective solution for women who have plans to start a family but are worried about their finances. As our data shows, too few women know about this product but are interested once they know how it works.
And in related news, Breeze just launched short-term disability insurance on our easy-to-use online platform.
It's the only individual short-term disability insurance plan with a 100% online experience and benefits for family leave.
If you're interested in seeing what you'd pay for short-term disability insurance, use Breeze to get a free online quote in seconds! You can then apply in just minutes.
Get a short-term disability insurance quote online.
Methodology
All data found within this report derives from a survey created and commissioned by Breeze and conducted online by survey platform Pollfish. In total, 1,001 actively-employed American women between the ages of 18 and 44 were surveyed. The appropriate respondents were found via Pollfish’s age, gender, and occupation filtering features. This survey was conducted between July 6th, 2022 and July 7th, 2022. All respondents were asked to answer all questions truthfully and to the best of their abilities.
Full survey results
Notes: Some answers won't add up to exactly 100% due to rounding.
If you'd like to see the raw data or data broken down by state, race, age, etc., please email me at [email protected]
1. On a scale from 1 (least important) to 10 (most important), how important is it to you that an employer offers paid maternity leave as an employee benefit?
- The average answer was 8. The plurality (34%) answered 10.
2. Do you believe the federal government should offer some sort of paid maternity leave program?
- 89% answered "yes"
- 4% answered "no"
- 7% answered "not sure"
3. Would you take a 5% pay cut at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 47% answered "yes"
- 53% answered "no"
4. Would you take a 10% pay cut at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 20% answered "yes"
- 80% answered "no"
5. Would you give up health insurance benefits at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 15% answered "yes"
- 85% answered "no"
6. Would you give up vision insurance benefits at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 30% answered "yes"
- 70% answered "no"
7. Would you give up dental insurance benefits at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 22% answered "yes"
- 78% answered "no"
8. Would you give up 25% of your PTO at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 22% answered "yes"
- 78% answered "no"
9. Would you give up 50% of your PTO at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 6% answered "yes"
- 94% answered "no"
10. Would you give up your 401(k) (or other retirement plan) at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 10% answered "yes"
- 90% answered "no"
11. Would you work an extra 10 hours per week at your current or prospective employer if they offered an 8-week paid maternity leave benefit?
- 38% answered "yes"
- 62% answered "no"
12. If you had to go on unpaid maternity leave for 8 weeks, do you have sufficient cash savings to afford this time?
- 30% answered "yes"
- 70% answered "no"
13. Do you think you would have any cash savings left after 8 weeks of unpaid maternity leave?
- 26% answered "yes"
- 74% answered "no"
14. If you had to go on unpaid maternity leave for 8 weeks, would you consider taking on more credit card debt than you’d feel comfortable with to cover expenses?
- 56% answered "yes"
- 44% answered "no"
15. If you had to go on unpaid maternity leave for 8 weeks, would you consider taking out a personal loan to cover expenses?
- 54% answered "yes"
- 47% answered "no"
16. If you had to go on unpaid maternity leave for 8 weeks, would you consider drawing from your retirement accounts to cover expenses?
- 49% answered "yes"
- 51% answered "no"
17. If you had to go on unpaid maternity leave for 8 weeks, would you consider drawing from your more-active daily investment accounts to cover expenses?
- 54% answered "yes"
- 46% answered "no"
18. On a scale from 1 (no setback) to 10 (major, possibly permanent setback), what kind of financial setback do you think you would be dealing with after 8 weeks of unpaid maternity leave?
- The average answer was 7. The plurality (16%) answered 10.
19. On a scale from 1 (no setback) to 10 (major, possibly permanent setback), what kind of career setback do you think you would be dealing with after 8 weeks of maternity leave?
- The average answer was 5. The plurality (16%) answered 6.
20. Have you considered taking out short-term disability insurance as a way to protect your finances against unpaid maternity leave?
- 38% answered "yes"
- 62% answered "no"
21. (Asked to those who answered "no" to Q20) Do you know what short-term disability insurance is?
- 58% answered "yes"
- 42% answered "no"
22. (Asked to those who answered "yes" to Q20 or Q21) Do you have to take out short-term disability insurance before you are pregnant in order to receive benefits for pregnancy?
- 50% correctly answered "yes"
- 50% incorrectly answered "no"
23. (Asked to those who answered "no" to Q21) Short-term disability replaces up to 60% of your regular income for weeks, months, or even years for injuries, illnesses, or pregnancies that leave you unable to work and earn a living. Would you consider purchasing this product?
- 81% answered "yes"
- 19% answered "no"
