The Pre-Existing Condition Provision in A Disability Insurance Policy

Most employer-provided Long Term Disability policies and some individual disability insurance policies include an exclusion for disabilities caused by a pre-existing condition. Generally, a disability insurance pre-existing condition is defined as a mental or physical condition for which you become disabled within the first 12 months of coverage and that existed and for which you received treatment within the 3 to the 12-month time period just prior to the date of coverage under the policy. The time periods, however, vary from policy to policy.

The purpose of the pre-existing condition exclusion is to prevent individuals who have been insured for one year or less (in most cases) from receiving disability benefits for injuries they had prior to the start of the policy. As such, the disability insurance pre-existing condition may result in a denial of benefits.

Most pre-existing condition provisions include two time periods: a “Look Back” period and a Pre-Existing Condition Waiting Period:

Look Back Provision:

This provision defines which conditions are considered to be “pre-existing.” Typical wording includes: “A condition for which medical treatment or advice was rendered, prescribed, or recommended or medications taken within the 6 months prior to the effective date of coverage.” Ninety days to six months are the norm for a look-back period.

Pre-Existing Condition Waiting Period:

This is the period of time you must be covered before a pre-existing condition no longer excludes the insured from coverage – even if the disabling condition existed prior to the Policy’s effective date or began during the first 12 months of coverage. It is usually one year, but can be longer depending on the plan.

Thus, under most policies if the insured becomes disabled more than one year after the policy was procured and coverage in effect, then the insurance company cannot deny benefits based on the pre-existing condition exclusion. However, where an insured becomes disabled within the first 12 months of coverage, it is not unusual for the insurance company to improperly deny benefits based on the pre-existing condition exclusion – even if it does not apply to the disabling medical condition.

If the insurance company can find any medical history even remotely related to the subject injury or illness, then it is quite likely they will determine the disabling condition was pre-existing and deny coverage. However, in many instances the disabling medical condition is not pre-existing and the prior treatment pointed to by the insurance company was rendered for treatment completely unrelated to the subject illness or injury.

Do not accept what the insurance company decides without a close review of your medical records and their rationale. Also, keep in mind that the pre-existing condition exclusion is tied to the date coverage under the Disability Policy became effective. Thus, if an insured had a medical condition at the time they took out the policy (and disclosed it if required on the application for coverage under the policy) which became worse over time and resulted in his or her inability to work 2 years later, that condition would no longer be excluded under the pre-existing condition provision.

Moreover, it is important to understand that many courts hold that the insurer has the burden of proving the applicability of the exclusion or at least making a sufficient showing of its applicability. It is thus the insurance company’s burden to provide sufficient evidence that the insured consulted, sought treatment or services, or took prescribed medication FOR the disabling medical condition during the “look back” period.

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If you have questions about your disability policy or claim; you are concerned that your policy’s pre-existing condition provision may apply to your claim; or your claim has been denied due to a pre-existing exclusion or for any reason, contact one of our experienced insurance claims attorneys today for a free consultation or (954)-989-9000. For more information about disability insurance claims, long-term care claims, or life insurance claims, please read our other blog articles.