Many Long-Term Disability insurance policies include provisions indicating that, under certain circumstances, you will not receive LTD benefits even if you have been found to be unable to work due to a medical condition. These are commonly known as exclusion clauses.
Insurers will often rely on these provisions in an attempt to avoid liability under the policy. For example, many policy holders find that they are denied benefits on the basis that their medical condition was pre-existing, that they failed to comply with medical care required, or that the circumstances under which they became disabled render them ineligible for benefits. The latter occurs, for example, where the insured becomes disabled due to an accident while driving under the influence, or the insurer argues that the illness or disability was self-inflicted.
Generally, courts have sided with policy holders in maintaining that where insurers wish to deny or reduce benefits there must be an explicit and unambiguous basis for it in the policy. This is the case where insurers offset money received by the policy holder against the benefits it must pay, or where there is an argument as to whether a type of disability is not covered under the policy. However, insurers have been successful in arguing that, even in the absence of an exclusion clause in the policy, when a policy holder refuses to submit to medical assessment or comply with medical treatment, benefits can be denied. Because of this, there is a risk that certain types of conduct which are not expressly outlined in an exclusion provision in the policy could potentially disentitled you from benefits. This risk highlights the importance of understanding your obligations under the policy with regards to medical treatment.
Similarly, pre-existing condition clauses are often raised by insurance companies when the policy holder becomes disabled. Most often, these clauses apply for the first 12 months of coverage. This means that when the policy holder becomes unable to work during the first 12 months, the insurer can raise the issue that the cause of disability was pre-existing. Pre-existing condition clauses are often very broad and include conditions that may be directly and indirectly related to symptoms the policy holder may have had in the past, whether diagnosed or not. For example, where the medical condition concerns mental health, and the policy holder has a history of seeing a psychologist or other mental health practitioners, the insurer is likely to argue that any mental health disability was pre-existing. Similar problems can arise regarding physical injuries where the policy holder has sought treatment for comparable issues in the past.
Because of the often-vague wording of exclusion provisions, policy holders may be surprised to find that that the insurer is now claiming that their medical condition is not covered, or that their conduct has somehow render them ineligible for benefits. It is important to consult a lawyer with expertise in LTD insurance as they can help you understand your policy coverage, obligations and examine your medical history to establish your entitlement to benefits. Contact us