You’ve paid your private disability insurance premiums on time for years. Then, when you file a claim for disability insurance benefits, you get a letter saying you “hid” a medical condition, and your policy is canceled or void. How can this happen?
Most private disability insurance policies require that you tell the truth and accurately describe your medical conditions in an application. But even if you’ve been completely truthful, insurers will sometimes try to void your policy to get out of paying your short-term and long-term disability benefits.
If you made a mistake on your disability insurance application or the adjuster claims you did, it’s time to consult an experienced disability attorney from Bryant Legal Group. Your disability benefits claim may still be legitimate, even if there were mistakes (or misrepresentations) in your insurance contract or application. To learn more, keep reading.
When Can an Insurer Cancel a Policy?
Under Illinois law, there are various reasons why an insurance company can cancel a disability insurance policy. For example, you’ll lose coverage if you fail to pay your monthly premiums or violate the terms of the plan. When this happens, you should get a written notice in the mail.
However, insurance companies can also void your policy or deny a claim if you made misrepresentations in your written application or other policy documents. Typically, the insurance adjuster will say that you hid a chronic or disabling medical condition. Instead of getting a cancellation notice, you may receive a letter denying your short-term or long-term disability claim.
Pre-Existing Conditions and Disability Insurance
When you apply for a private disability insurance policy, the insurer will typically ask you about your pre-existing conditions. It’s in your best interest to outline all of your chronic conditions and existing injuries. However, mistakes can happen. Other times, the insurance adjuster will study your medical records and search for evidence of an undisclosed, pre-existing condition.
Many private disability insurance policies include a detailed list of pre-existing condition exclusions. If your condition existed when you applied for coverage and is excluded, you’ll likely be denied benefits.
However, the adjuster will sometimes take things out of context. Suppose you occasionally complained of headaches at your doctor’s appointments, often due to allergies or a cold. Later on, you develop migraine headaches. The insurance adjuster may try to deny your migraine-related disability, arguing that you failed to mention your (unrelated) headaches when you applied for coverage. In this case, you should immediately contact a disability insurance lawyer and work with them to file an appeal or lawsuit.
- Related Article: Pre-Existing Conditions and LTD: 4 Things You Need to Know
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Misrepresentations Won’t Always Void a Disability Insurance Policy
In Illinois, our state’s Insurance Code outlines the circumstances when an insurer can rescind a policy and deny your disability insurance claim. Under Section 154 of the code, the insurance company must show that:
- The insurance contract or application contains a written misrepresentation
- Your statements were false, and you intended to deceive the insurance company
- The misrepresentation was material to the spirit of the disability insurance contract and would have influenced coverage
Generally speaking, an honest mistake on an insurance application will not give an insurer the right to revoke your policy.
For example, suppose you forgot about a childhood injury, and you didn’t include it in your application’s medical history section. Years later, when you file a claim for LTD benefits, the insurance adjuster denies your benefits due to this “misrepresentation.” As long as you can show that the error was unintentional, you should be able to enforce the insurance policy.
Whether a misstatement or omission is “material” is more complicated and depends on the circumstances. The insurer must show that, had they known the truth, they would have denied your coverage or changed the terms of your insurance policy.
For example, suppose you lied about your marital status in your application. Later on, you’re in a catastrophic car accident and suffer a spinal cord injury. Your marital status probably has nothing to do with your claim and would not have impacted the insurance company’s decision to cover you.
However, let’s say you have a long history of back pain. You apply for short-term disability coverage and fail to list your orthopedic doctor, your physical therapist, or your diagnosis on your application. Later on, you undergo spinal surgery due to severe degenerative changes. When you file for disability insurance benefits, you may face challenges due to your unreported medical history.
If the insurance company is arguing that you made a material misrepresentation, it’s best to contact an experienced disability insurance lawyer. They can guide you through this nuanced legal analysis and help you identify your next steps.
- Related Article: 5 FAQs About Private Disability Insurance Claims
Bryant Legal Group: We Stand Up to Insurance Companies in Illinois
At Bryant Legal Group, our team helps people across Illinois and Chicago get the disability insurance benefits they deserve. If your long-term or short-term disability insurer denied you claim due to a pre-existing or “hidden” condition, call us today. Our client-focused approach will help you regain control.
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