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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 apply 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 “look back period” and a “waiting period.”

Look 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 look back 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 a mental/nervous impairment, the mental/nervous limitation may not apply if the physical condition alone is considered the cause of your disability under 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.

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