Uncommon Exclusions in Some Disability Policies
Individual and group disability policies are complex legal documents. Unfortunately, most employers and employees do not take the time to read them, leaving uncertainty and frustration when it comes to claiming time.
You took the time to choose a disability policy that would most benefit you or your employees. You wanted to ensure that if you or your employees got seriously injured or ill, they would have reliable disability coverage to fall back on.
Unfortunately, many of the disability policies written today have exclusions that state what type of injury or illness is not covered. Some of these are obvious like intentionally injuring oneself, but many exclusions on disability policies fly under the radar.
Every insurance company includes a clause in their policy that lists exclusions to coverage.
Typical exclusions include:
- Self-inflicted injury
- Injury or illness suffered at war
- Criminal offenses, committing to a felony, DUI
Many policyholders do not even realize that their policy contains exclusions until their insurance company denies a claim because it is not covered. This could quickly turn to frustration and anger because you thought you paid for full coverage all along.
Disability claim denials are becoming more and more common. Individual and group long-term disability companies are making many exclusions more specific and encompassing more situations.
Uncommon Policy Exclusions
Policy exclusions allow the insurance company to avoid paying claims by excluding or limiting benefit payments to certain injury situations or illnesses. Many of the policy exclusions listed below appear unfair and even discriminatory. Each disability insurance company can generally exclude whatever they want, so you need a seasoned disability lawyer who knows and understands every possible exclusion, including the uncommon ones.
Here are some uncommon exclusions that could result in an automatic denial of your disability claim.
#1. Leaving The Country
If an employee spends six months or more per year outside of the U.S. or Canada, that may be a reason for the insurance company to deny a claim. Many immigrants who come to work in the U.S. often return home for extended periods to see family and enjoy special holidays and celebrations. This act of family support and travel could end up costing the employee covered under a group disability policy. Individual policies are more commonly now including an “outside the country” exclusion.
#2. Voluntary and Elective Treatments
If an employee has a voluntary or elective medical procedure and gets injured because of the procedure, some insurance companies would deny their claim based on that policy exclusion. Fertility treatments received by women are maybe a form of elective treatment exclusion. This puts women in a difficult situation. Cosmetic surgery could also disable a person and your disability benefits policy might not cover it.
Another exclusion contained in some individual and group disability policies is an injury or illness caused during war or an act of war. What is frustrating about this exclusion is that it often includes language that war does not have to be declared. Your policy might consider the terrorist attacks on 9/11, for example, as an act of war. If an insured got injured or fell ill because of the attacks, the policy may deny coverage under this exclusion.
Many businesses look to hire our veterans. Not only are veterans well-trained individuals, giving veterans employment can reward them for their service. If, however, their service causes a veteran’s illness or injury, it might fall under a policy exclusion and result in claim denial.
#5. Mental Illness
Under some disability policies, a mentally ill employee could be denied disability coverage because they attempted self-harm. Even if mental illness prompted their self-harm attempt, a long-term disability insurance company could deny you coverage and deprive you of benefits. Short-term group disability policies usually provide no coverage for mental illness. Your individual or group long-term disability policy will usually cap mental nervous benefits at 24 months.
Fighting Disability Claim Denials
Most employers and policyholders feel a sense of comfort knowing that they will have some coverage if they have a disability. Unfortunately, many insurance companies today continue to deny otherwise valid claims.
Insurance companies may deny coverage by claiming that the individual is simply not disabled or not disabled enough. Every disability policy has a different definition of a disability. Some policies say that an employee is disabled if they cannot perform the important duties of any occupation, not just their own. Other policies consider an employee disabled if they cannot perform the important duties of their own occupation. You need a seasoned disability lawyer who understands the definition your policy uses.
Sometimes, insurance companies deny claims because they determine the individual is not disabled, regardless of the definition they use in their policy. It might seem odd that a non-medical professional determine an insured is not disabled, but it happens frequently.
Another common reason insurance companies deny disability claims is that the medical records provided arguably, do not support a determination of disability. Doctors do not always provide enough detail, so it is up to the insured to ensure that they are submitting accurate, complete information to support their claim.
Mental conditions are another reason that an insured may get a claim denied. As discussed above, if insured harms themselves, that may trigger an exclusion. The insurance company will often do whatever it can to exclude coverage based on an insured’s mental condition.
Often, however, a policy will cover something that a person experiences. A policy might not cover mental or emotional disorders, but it could cover some of their physical manifestations (including reactions to the medication needed to treat chronic conditions).
Don’t take a denial sitting down. Check with an experienced individual or group long-term disability insurance lawyer to see how you can fight back—and win.
Finding The Right Coverage
When looking for a great disability policy, you need to consider the plan’s impact on yourself and your high-value employees. Do you or your employees leave the country as part of the important duties of their occupation? Are you or do you employ veterans?
An insurance company might deny a disability claim for countless reasons, not the least of which is that the insurance company simply wants to keep your premiums in its pocket.
If you can’t make heads or tails out of the legal exclusions in your disability policy, you could use the guidance and experience of a trusted individual or group ERISA attorney. If you are disabled or one of your employees has received a wrongful delay, denial, termination, or reduction of benefits because of an unusual exclusion, a long-term disability insurance lawyer can help you.
Contact an individual or group long-term disability insurance attorney today and overcome the challenges of uncommon and seemingly unfair disability policy exclusions.