Getting disability insurance with a pre-existing condition

Pre-existing conditions work differently under disability insurance than other types of insurance. If you have one, your condition may be excluded from coverage.

Zack Sigel


Zack Sigel

Zack Sigel

Managing Editor

Zack Sigel is a managing editor at Policygenius who oversees our mortgages, taxes, loans, banking, and investing verticals.

Published April 17, 2018|7 min read

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Disability insurance is protection from the risk of losing our income when you become injured or sick and lose your income. You keep your disability insurance policy in force by paying a monthly or annual premium, the amount of which is calculated based on the risk you pose to the disability insurance company that they’ll have to pay out.

The higher your risk, the higher your rates. Aside from your coverage needs – the amount of disability benefits you’ll need each month to replace your income and the duration – premiums are a factor of your age, occupation, medical history, and lifestyle. Your premiums could also be higher if you have any pre-existing conditions.

Pre-existing conditions are a commonly understood part of health insurance, but you can’t be denied health insurance coverage if you have one. That is not so under disability insurance. Additionally, you can often get disability insurance with certain pre-existing conditions but not with that pre-existing condition covered by the benefits. This is called an exclusion.

Exclusions mean that if you become sick or disabled and lose your income – the normal parameters under which you’d start collecting disability insurance benefits – you’ll be denied coverage if the illness or injury is caused by an excluded condition.

But you won’t be assessed a higher disability insurance premium if you have an excluded pre-existing condition. You just won’t receive coverage for that condition.

Read on to learn more about how pre-existing conditions will affect your disability insurance coverage:

What is a pre-existing condition?

In insurance, a pre-existing condition is a medical issue you have that may influence whether or not you qualify for the insurance coverage you’re trying to get. For example, it used to be the case that health insurance companies could deny you coverage based on pre-existing conditions you had that made you expensive to insure; the Affordable Care Act, also known as Obamacare, eliminated the ability of health insurance carriers to do this.

However, pre-existing conditions are still a major part of life insurance and disability insurance underwriting, the phase of the application process that ultimately determines your premium. If you have a pre-existing condition, some carriers will decline to insure you outright, while others will insure you but at a hefty premium.

Rules against insuring people with pre-existing conditions exist to protect insurance companies from someone to take out a policy after they get ill. Insurance companies protect you from future risk, not risk you already incurred and want to receive benefits for. They’re betting that you’ll pay premiums and not die or get disabled; if you already have a pre-existing condition, it’s like playing with a marked deck.

Common pre-existing conditions run the gamut from asthma to sleep apnea to cancer to physical deformity. Conditions that are not permanent are generally not considered when applying for insurance coverage, so don’t worry about whether being down with the flu for a week or two will affect your coverage.

The status of your pre-existing condition is assessed by the treatment you received for it. It will show up in your medical records, and both life and disability insurance companies will be poring over those looking for anything that could complicate your health picture, including visits to the doctor’s office and any prescriptions you’re taking.

But insurance companies also count on you to be honest about any conditions you have if you’re aware of any symptoms when you first apply, and they could deny you or your beneficiaries benefits when needed most if they determine that your claim is related to a pre-existing condition.

Disability insurance with a pre-existing condition

Disability insurance companies have their own way of dealing with pre-existing conditions. You can frequently get disability insurance coverage despite having a pre-existing condition, but that depends on the severity of the condition, and you’ll probably have to pay higher premiums if the condition is covered by the policy.

Some pre-existing conditions will automatically disqualify you from coverage if you’re still suffering from the condition when you apply for disability insurance. Cancer is one of these conditions, but disability insurance companies may still offer you coverage if you’ve been in remission for three to five years (the time frame varies between carriers). In such a case, you can get coverage but not for the cancer – it will be excluded. More on that in the next section.

You could also be declined for disability insurance if you have a condition that you wouldn’t otherwise associate with a debilitating illness, such as anxiety. Most people experience anxiety; it’s a natural response to stressful situations. But if your anxiety is so serious that you’ve been going to a doctor for treatment, or taking prescriptions, this will show up in your medical records. Anything in your medical records is fair game when insurance companies determine if they’ll cover you and at what price.

If you don’t mention your pre-existing conditions when applying, and the underwriters somehow don’t find out about them, they may cause you to be denied benefits when you do file a claim. The best way to ensure that you’ll receive disability insurance benefits when you become injured or ill and can’t work is to lay everything out when you apply. Warts and all, literally.

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Disability insurance is meant to replace your income when you become disabled.

Disability insurance exclusions: what coverage doesn’t cover

Disability insurance is unique among insurance products in that each policy comes with specialized riders that describe the types of conditions that you can’t receive benefits for. These conditions are called exclusions, and they exclude not just health issues but also risky activities and hobbies. If your claim for disability insurance benefits is based on one of these exclusions, it will be denied.

Not all pre-existing conditions are exclusions. And even though a pre-existing condition you have may be excluded from coverage, you can still get coverage in general. If you become disabled due to a condition that you didn’t have previously or wasn’t caused by something that was excluded, you’ll be able to collect benefits.

A common example is having a bad back. The language of the exclusion rider will state precisely what your condition is – a ligament strain or arthritis, for example – and will exclude a disability caused by that condition from coverage. But if you happen to injure your back in another way after becoming insured, say, from a ruptured disc or a treacherous acquaintance with a knife, you can still get coverage despite the exclusion.

Exclusions are a way for disability insurance companies to offer coverage to people with health issues; otherwise, it would be more profitable to just deny you coverage outright. (You may still get declined rather than an exclusion rider if your pre-existing condition is severe enough.) For example, if you’ve got a chronic condition that you’ve been steadily treating for years, you’ll probably just get an exclusion. But if the condition has only recently developed or had an acute flare-up, you could get declined, or your policy could get postponed until your condition has stabilized.

Exclusions also won’t increase your premium rate, since the premium is a calculation of how much coverage you need, and exclusions aren’t part of that coverage.

Every disability insurance carrier has different rules regarding how it treats exclusions. Have a look at your exclusion rider to make sure it’s what you were expecting. Even if your disability insurance policy has an exclusion rider, you should still file a claim if you become disabled. Because exclusions can be narrowly defined, the disability insurance carrier may still pay out benefits.

The reconsideration period

If you had a pre-existing condition for which an exclusion rider was included on your policy, that generally means you’re stuck with the rider indefinitely. Occasionally, though, you may recover from the condition, in which case you may want the disability insurance company to reconsider your risk and thus lower your premiums.

The reconsideration period lasts for a few years after your policy first goes into force. During that time, if the treatment for your condition has concluded and you’ve been symptom-free for two years, the insurance company may remove your exclusion rider.

Insurance companies make a distinction between conditions you can recover from and those that are permanent, such as cancer. The reconsideration period usually applies to physical injuries from which you have a reasonable expectation of making a full recovery.