Limitations and Exclusions in Disability Insurance Policies
Although disability insurance covers people in the event that they cannot come to work due to illnesses and injuries, their policies may not cover all of them. Before officially enrolling into long-term policies, insurance companies have to learn about the applicants’ medical information and lifestyle (Nabity 2017). Based on this information, insurance companies would include limitations and exclusions in their long-term policies (Nabity 2017). These limitations and exclusions allow insurance companies to give limited coverage and deny coverage for certain illnesses and injuries; however, people could still receive coverage for those things through other means.
Due to limitations and exclusions in their policies, people may receive less or no coverage for certain disabilities. Insurance companies include limitations and exclusions to peoples’ policies in order to “protect [themselves] from what [they see] as certain ‘high risk’ conditions pertaining to that applicant” (Warren 2015). Regarding limitations in long term disability insurance policies, “the [policies] may limit your benefits in certain circumstances,” such as “disabilities that are caused by mental illness or anxiety” (Nabity 2017). When these policies contain exclusions, “[the insurance companies] will not cover certain body parts, conditions, or disabilities resulting from certain activities” (Nabity 2017). Common exclusions include “injury or illness resulting from self-inflicted acts, criminal activities, acts of war, civil disobedience or rebellion, and from operating a motor vehicle while intoxicated” (Nabity 2017). Pre-existing conditions, which are “mental or physical [conditions] that existed prior to the effective date of your disability insurance policy,” are exclusions that allow insurance companies to deny coverage “for an illness or injury that existed, and that you knew about, prior to the start of your disability policy” (Marc 2017). Insurance companies can even deny coverage “for claims… related to a preexisting medical condition” (Nabity 2017). Policies may also exclude disabilities derived “from participation in a potentially hazardous activity” (Nabity 2017).
Though, people could still get coverage for disabilities excluded from their policies (Nabity 2017). People could get coverage if the illness and injury arose from a cause other than the preexisting condition stated in their policy (Nabity 2017). Additionally, an article, “The Most Common Disability Insurance Policy Exclusions & Limitations,” from DarrasLaw, a disability firm, states, “If you have other impairments that limit your ability to work, make note of it when filing your claim. While one condition may fall under a policy limitation or exclusion, another may deem you eligible for benefits” (2016). Insurance companies may analyze some exclusions in the future and determine whether to take them out from the policy (Nabity 2017). People could also remove exclusions from their policies, but may pay higher premiums for this since “removing them increases the [insurance] company’s risk” (Mercadante).
Limitations and exclusions protect insurance companies from covering disabilities that people have high chances of receiving. Even so, people could still receive coverage for those disabilities depending on their situations and by paying higher premiums.