Disability Insurance with a Pre-Existing Condition

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Pre-existing conditions are a common talking point when it comes to health insurance, and under current federal health care, you cannot be denied health insurance due to a pre-existing condition. When it comes to disability insurance however, there is a different set of rules. Depending on the specific condition and the insurance company, an individual with a pre-existing condition may be eligible for a disability insurance policy that excludes the pre-existing condition, a disability insurance policy with higher premiums, or they may not be permitted to get disability coverage at all.

As a rule, insurance companies try to take on as a little risk as possible when underwriting for a policy. As a result, they may charge more or refuse to cover a pre-existing condition that has a high risk of becoming disabling. This can be extremely frustrating for doctors on a tight budget, and many physicians are left wondering: is it even worth getting a disability insurance policy that excludes or charges higher premiums for my pre-existing condition?

The short answer is: yes. In spite of the exclusions and rate hikes, true own-occupation disability insurance is still an absolute necessity to protect doctors with a pre-existing condition in the event that they are not able to work. Even with pre-existing condition exclusions, a quality disability insurance policy will safeguard your financial security in the event you become disabled by any other accident, illness, or injury.

 

Defining a Pre-Existing Condition

It is commonly understood that a pre-existing condition is any medical condition that was in existence prior to the effective date of the insurance policy. In practice, most disability insurance policies lay out careful parameters to define under what circumstances a claim can be denied as a pre-existing condition. A typical policy may define a pre-existing condition as any condition:

  1. For which medical treatment was recommended by a doctor or received from a doctor within the 2 year period prior to your Policy Date; or
  2. that has caused symptoms within the 1 year period prior to your Policy Date, which would cause an ordinarily prudent person to seek diagnosis, care or treatment.
  3. Any condition that was misrepresented or undisclosed at the time of application.

Essentially, this language stipulates you can be denied benefits for any symptomatic condition that you knew about within the two years prior to the policy effective date or any condition that you reasonably should have known about within one year prior. However, based on this definition, if you are disabled by a pre-existing condition for which you have neither experienced symptoms nor sought care for a period of two years or more, your insurance company should still pay benefits.

Here are a few examples of how this pre-existing exclusion clause could play out in different situations:

 

  • Scenario One: An internist has struggled with shoulder pain for years, and the condition is irritating, although not disabling. In November of 2016, he visits a physical therapist to try to relieve the pain. The condition improves, and he purchases a new long-term disability insurance policy in January of 2018. By the end of the year, the shoulder pain is back, and this time it’s so severe that the internist can no longer work in his specialty. When he tries to claim disability benefits, the insurance company denies the claim as a pre-existing condition.

In this case, even though the condition became disabling after his policy went into effect, he had previously sought treatment for the condition within two years prior to the effective date.

 

  • Scenario Two: A cardiologist starts at a new hospital in January of 2018, and she purchases an individual long-term disability policy. That summer, she falls from a ladder while cleaning her gutters and suffers a serious spinal injury that becomes disabling. She claims disability benefits to supplement her lost income, and the insurance company agrees to pay benefits.

In this situation, the insurance company could identify that there was no prior treatment or symptoms of this spinal condition. This ailment clearly qualifies as an injury or illness that arose after the policy’s effective date, and therefore the claim will be covered.

 

  • Scenario 3: An anesthesiologist is prescribed medication for high blood pressure in June of 2018. In 2019, she purchases a long-term disability insurance policy and her hypertension is excluded from coverage as a pre-existing condition. Later that year, she suffers from a heart attack and tries to claim disability benefits. Her insurance company attempts to deny her claim by reasoning that her heart attack resulted from her excluded hypertension condition.

This case is less cut and dry than the previous examples. Often the cause-effect relationship of different health conditions can be hazy, and there will be a dispute about what disabilities can be excluded by a pre-existing condition. In this case, the anesthesiologist should contact a disability attorney, who can argue on her behalf that the heart attack is a materially different condition than her hypertension, and should not be subject to the exclusion.

 

In order to determine if a condition can be excluded as pre-existing, insurance companies will comb through your medical records including doctors visits, prescriptions, and specialist referrals. They will look for any evidence that you have previously reported symptoms or sought treatment for the condition the policyholder is claiming as a disability.  For this reason, it is best to be transparent about any pre-existing conditions when purchasing your policy and pay careful attention to the specified timeframe for exclusions.

Insurance companies will often try to use the broadest possible definition of a pre-existing in order to avoid paying benefits for a claim. If you feel you have been unfairly denied coverage because you’re claiming that a condition is pre-existing, consult a disability attorney.

 

Exclusions for Pre-Existing Conditions

In many cases, an insurance company will write a disability policy that covers a doctor with a pre-existing condition but excludes any disabilities resulting from said condition. These exclusions can specify a certain illness (e.g. diabetes) or body part (e.g. a bad knee) is not insured by the policy. A medical exclusion rider will not increase your premiums, because the insurance company is not underwriting any extra risk, they are simply not covering a specific condition.

For example, a physician with arthritis may be able to purchase a disability policy with an exclusion for their arthritic condition. If this doctor becomes disabled due to any injury or ailment other than his pre-existing arthritis, he can still claim disability benefits. However, if the arthritis worsens and prevents the physician from working, the exclusion will prevent him from claiming any disability benefits.

Exclusion riders should contain very specific language to outline what conditions are and are not covered by the policy. An individual is usually considered eligible for coverage with an exclusion when their condition is a specific, diagnosed medical problem with easily identifiable symptoms. It is more difficult to obtain exclusions for severe conditions such as cancer or serious auto-immune disorders because they are more likely to become disabling, and because the risks and symptoms are very broad and difficult to define with an exclusion rider. In these cases, an insurance company may decide to deny an individual from obtaining coverage outright.

Depending on the condition, it is sometimes possible to remove an exclusion after the policy goes into effect. This process is known as reconsideration, and it typically occurs in the case of physical injuries that may heal completely over time. Exclusions related to chronic or degenerative conditions are unlikely to be removed from a policy at any point. When you purchase an insurance policy, your insurance company should be able to indicate if and when an exclusion may be reconsidered.

 

Coverage for Pre-Existing Conditions

The list of ailments that can be classified as “pre-existing conditions” range from acne and sleep apnea to cancer and MS. Because of this vast scope, each individual case will be evaluated differently, and in some cases you may be able to obtain coverage for a pre-existing condition. Individuals with relatively low-risk pre-existing conditions, such as asthma, may be able to purchase an exclusion-free policy if they are willing to pay slightly higher premiums for the coverage.

Group disability insurance is another option for physicians looking to cover a pre-existing ailment. So far this article has focused on pre-existing conditions and individual long-term disability insurance, because this is type of insurance provides physicians with the vast majority of their financial protection from disability. However, short-term disability insurance usually offered by employers as a group plan, often offers better options for pre-existing condition coverage but will only cover you for a short period of time. Group plans are designed to cover large groups of employees, therefore the policies tend to take a “one-size-fits-all” approach that is less likely to exclude specific conditions. In this way, a short term group disability plan can be a useful supplement to a true own-occupation long term disability policy by providing short-term disability coverage for pre-existing conditions. However, physicians should be cautious when considering group coverage for protection for long-term disabilities, as the language in such plans often contains exclusions and deficiencies.

 

Conclusion

Purchasing long-term disability insurance as a doctor can seem like a daunting task, even for perfectly healthy physicians. For individuals with a pre-existing medical condition, the process can be even more challenging.

Doctors with a pre-existing condition are best advised to purchase a true-own occupation long-term disability insurance while they are still young, even if the coverage contains exclusions. Remember, each insurance company uses different guidelines to determine insurability, so even if one carrier denies you coverage, another carrier may be willing to offer coverage with exclusions. Over-time, you may even be able to ask for a reconsideration or pay higher premiums to include your condition.

A skilled insurance professional can help you find the best coverage for your situation to maximize your protection in the event that any condition, pre-existing or otherwise, causes you to become disabled.

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