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Do you have a pre-existing condition?
If so, you may be wondering if disability insurance will cover it. The short answer? Sometimes. If you have a pre-existing condition and need long-term disability insurance (LTD), this post will explain when disability policies will and won’t cover your condition.
What Are Pre-existing Conditions?
A pre-existing condition is a medical issue that you currently have or had in the past. Because insurance companies inspect your medical history when you apply for insurance, it may affect your ability to obtain coverage.
Insurance companies don’t care about temporary illnesses and injuries. So don’t worry if you catch a cold; it won’t affect your coverage. The more permanent and chronic the medical condition, the more closely the insurer will pore over your medical records.
For example, someone with asthma may have a more difficult time obtaining long-term disability insurance. The insurance company will look at your age, age at diagnosis, frequency and severity of attacks, tobacco use, and more before coming to a decision.
In general, the insurance company will want to know full details about the condition. You’ll have to answer questions about:
- The date of onset
- Symptoms you’ve experienced
- Treatment you’ve received
- Prescriptions you take
- The date of recovery
- Name of your healthcare provider
The important thing to keep in mind is to be honest when filling out the application. Insurance companies have a way of finding out the truth when a disability claim happens. If an insurer realizes that you intentionally—or unintentionally—deceived it, your LTD claim may be denied.
What is considered a pre-existing condition for long-term disability insurance?
Common pre-existing conditions that affect your ability to get disability insurance include:
- Arthritis
- Asthma
- Back pain
- Cancer
- Diabetes
- Heart attack
- Mental disorders
- Muscle and joint disorders
- Stroke
The insurance company will want to know that you received treatment for these conditions, reducing the chance of a disability claim in the future.
Also, it’s easier to get long-term disability insurance for conditions that you’ve had for several years instead of more recent ones. That’s because the older ones are more likely to be stable and maintained.
For example, the insurance company may offer you standard coverage if you had cancer but have been in remission for 3-5 years. It’s more likely to decline if you were recently diagnosed with cancer.
Pre-existing conditions also differ between life and disability insurance. While soft tissue injuries and illnesses like muscle pain aren’t a big deal for life insurance, they are a major factor for disability insurance. A significant percentage of disability claims result from these types of injuries and illnesses.
Although not a comprehensive list, these common medical conditions give you a good idea of things that may raise a red flag with an underwriter.
Can you get long-term disability insurance with a pre-existing condition?
The good news is that yes, it’s possible to get long-term disability insurance even if you have a pre-existing condition. Insurance is all about risk, so if the insurance company accepts your risk even with the condition, it will offer you coverage.
However, there’s a chance the pre-existing condition will result in modified coverage. This results in either an exclusion for the condition or an increased premium, as we’ll get to later.
If your pre-existing condition is severe, the insurance company may choose to pass on offering you coverage. In that case, you can try to find another insurer who is more lenient in underwriting. Otherwise, see if you can secure coverage through your employer or association under a group policy.
Does long-term disability insurance cover your pre-existing condition?
Insurance companies know the increased risks of disability claims from pre-existing conditions. Although it might not cover them (more on that in the next section), it’s still vital to have coverage for all other disability claims.
Disability Insurance Exclusions: What It Won't Cover
If you have a pre-existing condition, there is a good chance there will be an exclusion clause in your policy. The exclusion or limitation will result in a claim denial if you suffer a disability related to the condition.
For example, if you had cancer before, the insurance company may put an exclusion clause in your LTD policy for disabilities related to cancer. This means you will not receive benefits if your cancer returns and you cannot work.
Another common exclusion is for disabilities related to the back and neck. For example, if arthritis is causing back pain, your plan will likely exclude a disability caused by that condition. However, if you become disabled from an accident that injures your back, you should still be able to claim disability benefits.
Although exclusions aren’t ideal, it lets the insurer offer you LTD coverage for other disabilities while limiting its exposure to pre-existing conditions. Exclusions ensure that you can get disability coverage despite your medical history.
Each insurer is different, so the definition of the exclusion will depend on the company and the condition in question. Be sure to check the policy to find out the specifics of the exclusion. You may need to refer to this if you submit a long-term disability claim in the future.
Reconsideration of the exclusion
If you have a pre-existing condition that isn’t covered under the exclusion clause, it may not be permanent. In some cases, it will specify that you can have the exclusion reconsidered after several years. If you can show that you have the pre-existing condition under control later, the insurer may remove the exclusion.
Of course, you will have to submit evidence that the condition won’t be a problem in the future. After a thorough review of your health, the insurer will decide whether to remove the exclusion clause.
As soon as you’re eligible for reconsideration, it would be best if you got it done right away. You never know when another injury or illness will happen, causing the insurer to rethink the reconsideration.
Modified disability insurance policy
Besides an exclusion, the insurance provider can also modify your policy in the following ways if you have pre-existing conditions.
Increase premiums
The premium is how much you pay for LTD benefits. By increasing the premium, it offsets some of the additional risks of your pre-existing condition. Premium increases start at 25% and go up from there.
Limit the benefit period
The benefit period is how long you will receive benefits when you’re on a disability claim. Most people buy an LTD policy with the longest benefit period, which pays disability benefits until you’re 65.
Insurance companies have the option of offering LTD coverage with a limitation on the benefit period. For example, it could limit your disability claim to five years for disabilities that result from your pre-existing condition.
Extend the waiting period
On top of limiting the benefit period, insurance companies can also extend the waiting period. This is the time you need to wait after you become disabled before benefits start.
Instead of 30 days, you may need to wait 90 days or longer before you can collect long-term disability benefits. This limitation would only apply to your pre-existing condition.
Where can you get a non-modified LTD policy?
The two main sources of a non-modified LTD policy are via group benefits and accident insurance. Let’s take a look at each.
Group benefits
Besides a personal insurance policy, you may also be able to get LTD benefits through your employer. Although these group policies have more coverage limitations, they should cover your pre-existing conditions. Another benefit is that the application process is also much quicker, giving you disability coverage within days.
Keep in mind that you may lose LTD benefits if you switch employers or leave your job. Also, fewer companies in Canada offer LTD coverage now because of its cost. For these reasons, you might not be able to keep your group LTD policy until you retire.
Accident insurance
If you were declined disability insurance that covers injuries and illnesses, you may still be able to get accident insurance. Because accident insurance only covers disabilities caused by injuries, your medical conditions don’t play a role in underwriting.
However, accidents only cause a small portion of disabilities, so they don’t give you comprehensive coverage. Still, it’s better than not having any disability insurance.
Do You Have A Pre-existing Condition And Need Disability Insurance?
Are you worried about getting disability insurance with a pre-existing condition?
If so, we can help you find the right plan! We work with many disability insurance companies who look at your pre-existing condition differently.
Disability insurance can help protect your income if you’re unable to work because of an illness or injury. Even if disability insurance has an exclusion clause for your pre-existing condition, it’s still crucial to purchase it to cover other types of disabilities.
If you want an assessment of your pre-existing conditions, contact us today and get our expert opinion! You can reach us at 604-928-1628 or info@briansoinsurance.com.
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While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
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