Disability insurance and pre-existing medical conditions

All disability insurance policies have limits in what they cover. One of these limits has to do with pre-existing health or medical conditions. The ideal situation for any consumer is to buy a policy BEFORE incurring any kind of medical complication. However, not all consumers are in excellent health at all times.

Majority of long-term group policies will completely exclude disabilities arising from pre-existing medical conditions. This means no benefits will be paid out if it is established that a disability is a result of such a pre-existing condition. Individually purchased long term policies also have these exclusions however, a consumer can avail of special coverage by paying a higher premium. Special coverage would mean that a certain exclusion will not be made part of the policy.

How pre-existing medical conditions are defined by disability insurance policies

Typically, a policy defines pre-existing medical conditions based on the following time periods:

  • The look back period - here, a condition is said to be pre-existing when it is within the policy's specified time limit. Typically, a look back period is ninety days up to twelve months.

    An example of a provision on a look back period may go along these lines: "A pre-existing medical condition refers to sickness or injury wherein the individual received medical attention, incurred costs or took medication within ninety days before effectivity of the policy, or, it may be a condition which would cause a prudent individual to seek expert diagnosis."

    Be aware that not all insurers honor this provision. Some may also add a waiting period to this provision.

  • The waiting period - here, the insured individual has to be under coverage for a certain time period before a pre-existing medical condition can be covered. Generally, the waiting period can be somewhere between one to two years. Waiting periods vary from one policy to another and they also vary from state to state because of local legislation.

Disability insurance and certain pre-existing conditions

  • Pregnancy - A pregnant woman who applies during her first trimester may be able to get coverage. However, the insurance company is likely to deny her claims if she is unable to continue with her job as a result of complications arising from her pregnancy. If the application is made when the first trimester has passed, it is likely that the insurer will deny her coverage because of too great a risk on the part of the insurance company.

  • Diabetes - Anyone with this disease will find difficulty in getting a policy. Even under the Social Security program, the only ones who can get their benefits are those who can show that they are suffering from serious complications arising from this illness. Experts recommend getting the disease under control first to increase chances of finding an insurer.

  • Alcoholism and drug use - The effect of alcohol and drug use on an individual's chances of getting a disability policy is hinged on how these conditions contribute to the person's disabling health condition. If these are seen as having material impact leading to medical impairment, the application for coverage will be denied. The DAA determination (drug and alcohol abuse) will be used to evaluate an applicant.

  • Cancer - Cancer survivors are likely to face difficulty in getting a policy. A self-employed individual applying for private coverage may be charged with costly premiums, longer waiting periods and exclusions for having a pre-existing condition. In general, access to coverage will depend a lot on state laws. There are states where the law specifically deals with cancer; for instance, the period of time that an insurer denies coverage to an individual will be limited.

Medical exclusion riders

These riders allow individuals with pre-existing conditions to get disability insurance. An exclusion rider is attached to a policy for the purpose of identifying and excluding these conditions. When the insurer deems it is important for a policy to get a rider, the policyholder gets informed about this. The individual will have to sign this to allow the policy to be enforced.

How medical exclusion riders work on a disability insurance policy

The insurer will review your past medical history and your current profile. It will consider medical rider(s) under the following conditions:

  • When it identifies a condition you have which it considers as having an impact on your chances of filing a claim in the future,
  • When it establishes you have a clear medical problem based on a record of symptoms observed. Examples are musculoskeletal, joints and organ disorders.
  • When it finds out you have an impairment that is recent, likely to happen or is severe.

When these conditions are excluded from coverage, your insurability risk in the eyes of the insurer is lessened.

Re-evaluating medical exclusion riders

Not all medical exclusion riders are permanent; some can be subject to reevaluation and may even be removed.

Policyholders with these riders who believe their conditions have improved, may request the insurer for a reevaluation of their medical profile. Generally, this type of request is successful when:

  • Enough time has gone by and the insurer is convinced that there is no chance for the condition to recur or be aggravated anew. How long this time would be would depend on the medical condition and on the review of the insured individual's medical records.
  • The medical condition has been fully eliminated. There is absence of recurring symptoms as supported by medical records.

How to avoid claims from being denied because of pre-existing medical conditions

  • Be aware of the medications you are taking. If a certain medicine is for prevention of an injury, which earlier classified you under a high-risk group, the insurance company may use this to deny your claim.
  • Take note that injury treatments that were administered before you purchased the policy may be recognized as medical history which can be used to deny claim.
  • Know that any record of treatment or surgery that shows you are prone to suffer disability can also be used to deny claim.

What to do if your claim has been denied

  • Carefully review the letter denying the claim. There are cases where an insurer erroneously connected a current injury with an old one when these are similar but are unrelated.
  • Be sure your physician makes it an effort to clearly identify your disability along with its cause.
  • Keep a good track and maintain your medical records. This way, you have proof that your current disability has nothing to do with an old injury.
  • Also, keep a complete record of all your interaction and communication with the insurance company.
  • Be aware of your policy's date of issue. If an injury happened to you after your purchase of a policy and it did not limit your capacity to do work, but it did however, worsened over time and has affected they way you work, it cannot be deemed as a pre-existing condition.
  • Seek the advice of a trusted and experienced lawyer.
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