What Is an Exclusion Clause in Long Term Disability Insurance?

Simply put, the exclusion clauses in your long-term disability insurance may prevent your eligibility for LTD benefits based on a technicality. The most common exclusion pertains to preexisting conditions — injuries or illnesses that existed, and which you knew about, prior to the start of your disability policy. The purpose of an exclusion is to limit the risk of new hires to employers who have purchased the policy. However, to people who have become suddenly injured or ill, exclusion clauses can seem like unfair ways for insurers to get out of providing assistance to those who are truly in need.

What are long-term disability exclusions?

The exact exclusions that pertain to your case are written into your insurance contract. These may include:

• You had knowledge of your symptoms and condition before or within 90 days of obtaining a new policy.
• You became sick or injured while committing a crime, incarcerated, participating in a riot, or declaring war.
• Your injuries were intentionally self-inflicted.
• You failed to remain under continuing medical care.
• You were using drugs or alcohol at the time of injury.
• Your workplace injury or illness can be claimed under primary WSIB.

If any of these conditions are met, you can be excluded from coverage and receive no compensation, despite being unable to work. Through specific policy language, the insurer has attempted to minimize unreasonable and unfair risk. However, many of these exclusions are worded ambiguously and open to interpretation by a judge. It’s worth speaking to a long term disability lawyer if you feel you have been unfairly denied LTD compensation.

Full vs limited exclusions 

There are two types of exclusions found in disability insurance policies that may affect your claim:

• Full exclusion – With a full exclusion, the plan will not cover you for any medical conditions you had prior to enrolling in the plan. Depression and anxiety are commonly excluded conditions, for instance.
• Limited exclusion – With a limited exclusion, you are free to make a claim based on a preexisting condition, so long as you do so after the waiting period. Cancer may fall under a limited exclusion if you were had been in remission for three to five years when you applied for insurance.

Exclusion periods are time-limited

With particular regard to the preexisting conditions clause, there is a limited period of time for its application:

• The look-back period: Generally, three months before your effective insurance date, there should be no evidence that you were seen, tested, treated, or diagnosed for a particular illness or injury.
• The waiting period: Once you begin a new job or LTD insurance policy, your benefits do not kick in until the waiting period is over. The waiting period can be as short as 90 days or up to 365 days.

If you have been perfectly healthy, you may not think twice about job-hopping. But if you have recently struggled with symptoms of illness or injury, it is important that you consider the potential impact of switching employment.

Can you get long-term disability insurance with a preexisting condition exclusion?

You may be able to obtain disability coverage with a preexisting condition if you’re on a private policy, and you’re willing to pay a higher premium. Anything in your recent medical records will be fair game, so it’s important to lay everything out when you apply to avoid disappointment later.

Can a lawyer help with exclusion clause disability insurance denials?

Disability insurance is complex and confusing at best. Insurers are notorious for writing policies in ambiguous language and interpreting the policy in unreasonably restrictive ways.

Hiring a long term disability law firm will let you know what, if any, options exist for obtaining long-term disability coverage for your illness or injury. It costs nothing for a free consultation with a personal injury lawyer at Preszler Law. Since this type of disability income benefit can be paid out until your 65th birthday, it is especially important that you find an advocate willing to fight for you.

If long-term disability insurance through your employer is not allowed, you can learn more about Canada Pension Plan benefits and workers’ compensation benefits, which can provide supplemental coverage.