Question:

Do the Circumstances or Causes of Disability Affect Disability Insurance Benefits?

How the Circumstances or Causes of Disability Might Affect Disability Insurance Benefits

The statistics of disability often influence the cost of coverage of disability insurance. However, the causes of disability can also affect disability insurance benefits. It is important that you are aware of these in your current or future disability income insurance contracts.

Almost all disability insurance contracts have one or more “exclusions” that stipulate under which circumstances disability income benefits will NOT be paid. These stipulations outline circumstances and/or causes of disability that are “excluded” from coverage. Here are some of the most common exclusions found in many disability income insurance policies.

• Pre-existing conditions. This is a very common exclusion from many types of health insurance coverage. Many insurance companies have no desire to be responsible for medical conditions that existed before a disability policy was issued.
• Mental disorders. Because of the difficulty of diagnosis and sometimes extended recovery time needed, mental health disability coverage is often excluded or restricted in many policies. However, because of the often high stress levels faced by professionals, if this coverage can be included in an individual disability insurance policy, it is often wise to purchase it.
• HIV (Human Immunodeficiency Virus). Unlike an unavoidable illness or injury, many insurers believe (and not always correctly) that this disease is avoidable and should be excluded from coverage. Another factor favoring exclusion is the length and cost of treatment, both of which could be extensive.
• Acts of war and/or active military service. Because of the disability statistics related to military service, many insurers exclude coverage, regardless of your personal medical history.
• Pregnancy. Although sometimes covered in short term disability insurance situations, this cause of disability is often excluded from coverage.
• Disabilities encountered while on foreign travel. Many disability income insurance policies will exclude coverage while you are traveling outside of the U.S. The likelihood of disability increases for a variety of reasons and this incidence of disability motivates some insurance companies to make this an exclusion.
• Certain activities that have high disability risks. Some personal interests, like sky diving, amateur race car driving, ski racing, etc., have higher statistics of disability than other hobbies, like stamp collecting, bowling, video games, etc. Most disability insurance carriers are willing to compensate you for dropping a bowling ball on your foot if it causes a real disability, but are not as inclined if you ski off the race course into a tree.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.