Common Reasons Disability Insurance Claims are Denied

Disability insurance policies are designed to provide peace of mind to individuals in the workforce. The policies pay a periodic benefit in the event that an insured person becomes disabled as a result of a sickness or accidental injury and can no longer work. However, purchasing the insurance and paying the premiums does not guarantee that a disability benefit will be paid. Insurance companies deny disability claims for a multitude of reasons. The following is a brief description of some common reasons that disability claims are denied:

Failure to Meet Definition of Disability

Each disability policy contains a definition of the term “disability”. The definition will vary in different policies, but most definitions require an insured to be incapable of performing their own job duties due to a sickness or injury. The insurance company will examine a claimant’s medical evidence, including doctor charts, test results, and medical reports, and also review the claimant’s occupational duties. If the insurance company determines that a person is capable of performing their job duties, they will deny the claim on the grounds that the claimant did not meet the definition of disability.

No Objective Evidence

Certain types of illnesses, such as fibromyalgia and chronic fatigue syndrome, cannot be definitively proven by x-rays, MRI’s or other diagnostic tests. Despite the fact the claimant is experiencing severe pain and/or fatigue, insurance companies often deny these types of claims on grounds that there is no objective evidence of disability. In other words, the insurance company has decided that the claimant’s self-reported symptoms are not sufficient to establish a compensable disability claim.

Pre-Existing Condition

Most disability policies contain clauses that exclude payment of benefits for any pre-existing medical conditions. A disability is deemed to be pre-existing when the claimant suffers from the medical condition before becoming insured under the policy. Group disability insurance policies (placed through employment) will usually only exclude a pre-existing condition if a disability claim for that condition is submitted within one year after the claimant becomes insured under the policy.

Policy Exclusions

Every long-term disability policy will contain a list of exclusions. For example, an insurance company will not pay a benefit for any disability caused by an intentional self-inflicted injury. Neither will a benefit be paid if the disability occurs as a result of a commission of a crime or illegal act. A disability policy may also exclude disabilities that result from participation in a riot, war, or a disability arising out of the use of drugs or alcohol.

Contractual Eligibility

The majority of group long-term disability policies which are placed through employment contain technical eligibility requirements. There may be a waiting period for which a person must be employed before being eligible for coverage. Most group policies also have “active employment” clauses which require an employee to be working a minimum number of hours before being eligible for benefits.

Misrepresentation on the Application

Individuals who wish to purchase a personal disability insurance policy will normally complete a full application, including a health questionnaire. If an individual is not truthful on the application, or fails to disclose important medical information, the insurance company may deny any subsequent disability claim and void the policy on the grounds of material misrepresentation.

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Regardless of the reason that a disability claim is denied by an insurance company, it is important to speak to a disability lawyer about your case. The insurance company’s decision is not necessarily the final word - a court of law may strongly disagree with the insurance company’s denial of benefits. A disability attorney can advise you of your legal rights and can commence a lawsuit against the insurance company for the recovery of benefits.

Mehran Yazdani
Ontario Disability Lawyer
http://www.DisabledLaw.ca