Disability Insurance Exclusions: We Answer Your FAQs

When you file a claim for individual disability insurance benefits, you assume everything will go smoothly. Unfortunately, even if you hand-picked your policy’s terms and conditions, you may discover that exclusions and limitations can impact your short-term and long-term disability benefits. In this article, we answer our clients’ frequently asked questions about policy exclusions.

What Are Disability Insurance Exclusions?

When you purchase disability insurance coverage, you’re presented with various choices that impacted both your monthly premium and your coverage. In all of that fine print, you probably agreed to a series of exclusions. A disability insurance exclusion outlines certain situations where the insurance company does not have to pay you a monthly benefit.

Common disability insurance exclusions include:

  • Pre-existing conditions: Depending on your policy’s language, it may exclude some or all of your pre-existing medical conditions
  • Self-inflicted injuries: Most policies will not cover injuries related to self-harm or a suicide attempt
  • Acts of war and conflict: The insurer might not cover injuries that you suffer during a conflict, riot, or another violent episode
  • High risk or hazardous activities: Some policies exclude injuries and conditions related to high-risk activities, such as “extreme” sports
  • Work-related conditions: If your occupational injury or illness is covered by workers’ compensation benefits, some long-term disability policies will exclude it
  • Condition-specific exclusions: Your policy may specifically exclude certain health conditions, like cancer, diabetes, or lung disease

Generally speaking, you’ll pay higher premiums for a policy with fewer exclusions.

How Do Exclusions for Pre-Existing Conditions Work?

When you sign up for private disability insurance, you’ll need to disclose all your pre-existing conditions. The insurance company will then use this information to draft a policy, set your monthly premiums, and assess your level of risk.

If you have many pre-existing conditions, you’re more likely to file a claim, which makes it harder for the insurance company to make a profit on your policy. To protect its interests, the insurance company will either insist on a higher monthly premium for your policy or include a series of pre-existing exclusions that limit your coverage.

Sometimes, however, insurance adjusters use pre-existing condition exclusions as a weapon. They may try to apply an inapplicable exclusion in your disability insurance claim. Or they may scour your medical history, looking for “unreported” conditions or evidence that your condition existed long before you obtained coverage.

In these cases, it’s best to consult an experienced disability lawyer. You’ll need sophisticated legal strategies and a strong foundation in medicine to fight back against these tactics.

RELATED: Pre-Existing Conditions and LTD: 4 Things You Need to Know

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Where Can I Find My Policy’s Exclusions and Limitations?

You can find all the exclusions for your disability insurance policy in your Plan Document. However, this document can be long, dense, and hard to read. You may also find a rundown of your policy’s exclusions in the Summary Plan Description, which is a shorter, easier-to-read discussion of your policy’s terms and conditions.

When in doubt, it’s best to consult an experienced long-term disability or short-term disability lawyer at Bryant Legal Group. We can help you understand your policy’s precise requirements, determine whether exclusions apply to your claim, and assess the legality of terms and conditions.

RELATED: 5 FAQs About Private Disability Insurance Claims

Can the Insurance Company Enforce Ambiguous Exclusions?

Insurance companies often include ambiguous exclusions in their disability policies. These vague exclusions serve two primary purposes:

  • Attracting prospective policyholders: Many people interpret ambiguous exclusions favorably, assuming their claims will be covered.
  • Denying claims: In reality, insurance companies often apply exclusions very strictly and use them to deny legitimate claims.

If the insurance company uses an ambiguous exclusion to deny your disability insurance claim, Illinois law may support your argument for benefits. Like many other states, Illinois applies the strict insurance ambiguity rule. This ambiguity rule (more formally known as the contra proferentem rule) requires that any ambiguities in an insurance policy, including ambiguities in exclusion clauses, be strictly interpreted in favor of the policyholder and against the interests of the insurer.

For example, suppose your long-term disability insurance policy has an exclusion clause that disqualifies movement-based disabilities. Later, you suffer a disabling illness where, among many other symptoms, one of the symptoms includes erratic movements. You file a disability benefits claim, and the insurer denies your claim on the basis of the exclusion.

The movement-based exclusion itself is ambiguous, and it could be reasonably interpreted to exclude only those disabling conditions where the primary symptom is a mobility issue, such as Parkinson’s disease. As interpreted by the insurer, the exclusion is so broad that it would include any illness or injury that had even minor effects on one’s mobility. Given this ambiguity, a court would likely interpret the exclusion in a favorable way to your interests as the policyholder. So, you may be entitled to benefits despite the adjuster’s initial denial.

In some cases, the language in an exclusion clause is not obviously ambiguous. When that happens, the court will allow each party to introduce outside evidence to clarify the ambiguity issue.

What If I Disagree with the Insurance Company’s Decision to Exclude My Claim?

When you disagree with the insurance company’s decision or use of an exclusion, you have the right to file an appeal. Typically, in a private disability insurance case, the appeal process involves filing a state-court lawsuit. If the insurance company acted in bad faith, you can also request additional damages to address their misconduct.

Bryant Legal Group: We Stand Up to Insurance Companies

At Bryant Legal Group, our experienced team helps people across Illinois and Chicago get the disability insurance benefits they deserve. If your long-term or short-term disability insurer insists that an exclusion applies to your disability claim, call us today. Our client-focused approach will help you regain control.

To schedule your free initial case evaluation, either use our online form or call us at (312) 561-3010.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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