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The Most Common Disability Insurance Policy Exclusions & Limitations


If you file a long-term disability insurance claim, you do so with the expectation that your company will treat you fairly and pay you timely benefits. After all, you’ve paid a rich premium to ensure you’re covered for a disabling illness or injury.

However, many long-term disability insurance policies have exclusions and limitations that may prevent you from collecting benefits. Learn about the most common exclusions and limitations and how they may affect you.

Preexisting condition limitation

If you have a known and treated medical condition before you apply for your disability insurance policy, the insurance company applies the preexisting condition clause to limit your benefits.

In many cases, a long-term disability policy defines a pre-existing condition according to two time periods: a “lookback period” and a “waiting period.”

Looking back periods define which conditions are preexisting under the policy. They often range from 90 days to 6 months, but may even last as long as a year. The insurance carrier will look back through your medical history to see if you were treated, been evaluated, been told, or had any known indication of a disease or disorder.

The waiting period is the amount of time you must be covered before a preexisting condition that falls under the lookback period can be covered. The average period is somewhere between one and two years but can vary by policy and by state.

Mental/nervous limitation

The mental/nervous limitation is the most common exclusion in a long-term disability insurance policy. Although some insurers do not put limits on claims caused by mental and nervous conditions, you can expect to see this provision in your policy.

What does it mean? If your disability is contributed to or caused by a mental/nervous condition classified in the most current edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association, your payment of benefits will be limited to the period set forth by your policy. Conditions often include stress, anxiety, depression, or dementia. The most common mental/nervous benefit period limitation is two years.

Alcohol and substance abuse limitation

Typically, the most current edition of the Diagnostic and Statistical Manual of Mental Disorders also classifies the definitions of alcohol and substance abuse-related conditions.

Coverage for a disability arising from substance abuse or alcoholism is often capped at 24 months, but in some cases may not be covered at all.

If you are taking prescription medication for a diagnosed physical condition, be very wary of the substance abuse limitation. Some medications are easily abused, and insurers may argue you are taking more than warranted for your injury or illness. If the substance abuse limitation kicks in, your legitimate insurance claim for a physical condition may be restricted or even denied.

Other exclusions

Many disability insurance policies have several lesser-known exclusions, including:

  • Injuries caused by aircraft (except to passengers on scheduled airline flights)
  • War or acts of war
  • Suicide attempts
  • Normal pregnancy
  • Injuries on the job
  • Intentional acts causing disability

Overcoming the exclusions and limitations

Many disability insurance claims are limited or denied because exclusions or limitations are being asserted. However, these policy restrictions do not mean it is impossible to collect your disability benefits.

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. For example, if you have a physical condition in addition to mental/nervous impairment, the mental/nervous limitation may not apply if the physical condition alone is considered the cause of your disability under the policy language.

A top-rated disability insurance litigation attorney can help you navigate tricky policy language and file a bulletproofed claim for benefits. If you need help with your long-term disability claim or have questions about your policy or benefit eligibility, contact DarrasLaw for a free consultation.

Frequently Asked Questions About Disability Insurance Policy Exclusions & Limitations

What happens if my insurance company includes ambiguous exclusions in its disability policies?

Unfortunately, some insurance companies often use vague language in their policy exclusions to attract prospective clients or deny legitimate claims. Many states have laws protecting consumers from falling victim to ambiguous exclusions by strictly interpreting the language of the exclusion in favor of the insured rather than in the insurance company’s interests.

If you believe your LTD insurer used an ambiguous exclusion to deny your claim, discuss your situation with an experienced disability lawyer as soon as possible to learn more about how to secure the benefits your policy should provide.

Wouldn’t it be easier to apply for SSDI benefits if I have a disabling condition and am unable to work?

In many cases, you can both file an LTD claim as well as apply for Social Security Disability Insurance benefits. However, to apply for SSDI, you must have a condition that prevents you from performing any type of work for at least five months. A disability insurance lawyer can help you determine if you meet the qualifications to apply for SSDI in addition to filing a disability claim.

If my disability claim is denied, how do I appeal the decision?

If you have received a denial of your claim, you will have 180 days to file an appeal. Contact an experienced disability insurance litigation lawyer to assist you in gathering the evidence needed to prove your claim in the appellate process.

Generally, this type of claim is filed in either state or federal court, and if the insurance company has acted in bad faith, the law permits you to seek the recovery of additional damages.

Bad faith insurance practices involving LTD include:

  • Denying the claim for an invalid reason or not providing a reason for the denial.
  • Failing to respond to repeated requests for information about activity on the claim from the claimant.
  • Delaying a decision on the claim.
  • Failing to accurately or fairly investigate the claim.
  • Altering your policy after the claim is made in order to have a reason to deny it.

Do I really need an attorney to appeal an LTD insurance claim denial?

Yes. While there is no law requiring you to have attorney representation when appealing the denial of your claim, it’s to your greatest advantage to seek legal counsel with our Seattle disability lawyers.

An experienced disability insurance litigation attorney is extremely useful during the appeals process:

  • Ensuring you have all of the evidence to prove your claim.
  • Understanding the legal requirements for denying claims, the elements of bad faith, and how to successfully pursue your claim.
  • Meeting the deadlines that control your case.

The insurance company will have legal counsel when defending the denial of your claim. You must have sound guidance, too.

DarrasLaw is Americas' most honored and decorated disability litigation firm in the country. Mr. Darras has seen more, evaluated more, litigated more, and resolved more individual and group long term disability and long-term care cases than any other lawyer in the United States.

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