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Article 8 of 15 in Sample Disability Insurance Policy and Provisions Review |
Disability insurance pre-existing condition exception |
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This policy, like most disability income policies, specifically excludes coverage for pre-existing conditions and allows benefits only for sickness or injury that occur while the policy is in force. Coverage is determined by facts that document when a disabling illness or injury actually began, the specific language in the policy, and applicable case law. Not surprisingly, this subject prompts a great deal of litigation.
EXCEPTIONS
PRE-EXISTING CONDITION EXCLUSION
We will not pay any claim for a loss which:
- Results from a pre-existing condition which was not disclosed in this policy’s application; and
- Begins within 2 years after the Policy Date.
Pre-existing condition means a condition:
- 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
- Which has caused symptoms within the 2 year period prior to your Policy Date which would cause an ordinarily prudent person to seek diagnosis, care or treatment.
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COMMENT:
A pre-existing condition is a mental or physical condition not mentioned in the application that manifests itself prior to the effective date of the insurance policy. A pre-existing condition exclusion prevents you from obtaining insurance coverage for any condition for which you were treated or that you knew about or should have known about for two years prior to the effective date of the policy. This exclusion serves two purposes: The first is to avoid anti-selection and the second is to keep health costs as low as possible. Anti-selection occurs when someone waits to buy insurance until they know they have a condition that would be covered by the policy. This exclusion means that treatment for a pre-existing condition is not covered unless that treatment does not begin until at least two years after the effective date of the policy. If your condition is reflected in your application, subsequent treatment for that condition can be excluded by rider but cannot be excluded under this provision.
The key question here is when a disease or condition is manifest. Most courts recognize that a disease or illness is manifest when a medical professional can diagnose the condition with reasonable certainty because of a distinct condition or symptom. You do not have to be disabled from the condition for the condition to be considered manifest. The determination of when a medical condition is first manifest can be difficult and often rests on a question of fact. Is the present disabling condition the same as the one that existed prior to the coverage effective date? Is this a new condition or simply a continuation of an old one?
Generally, benefits are deemed to be payable if manifestation occurred after the effective date of the policy even though a condition may have been quietly present prior to the effective date of coverage. For example, if at the time of application you suffer from an undiagnosed and asymptomatic (no apparent symptoms) brain tumor, you likely will be entitled to disability benefits if the tumor is discovered after coverage is effective because the tumor had been developing quietly and had not manifested itself before coverage.
Treatment for a disease and disability as a result of that disease are evidence of manifestation. However, neither treatment nor disability is necessary for a determination of manifestation because a condition is considered to have manifested itself when the symptoms would have led to a diagnosis if they had been disclosed to a physician. Courts also consider whether the insured suffered the type of pain or abnormal functioning that would ordinarily lead a prudent person to seek diagnosis or treatment in the determination of manifestation. Despite the element of reasonableness, the issue is the subject of a great deal of litigation. |
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