What is an exclusion rider and how will it affect my physician disability insurance policy at the time of claim?
What is an Exclusion Rider?
Typically, an exclusion rider will state that benefits are not payable for disability resulting from a named condition (i.e., Gastro esophageal Reflux Disease), injury, disease or disorder of an area or part of the body (i.e. lumbosacral spine). The intent of the rider is to exclude or restrict coverage for a known pre-existing medical condition or a condition that predisposes you to a potential disability.
How Does it work?
In the event an injury or illness prevents you from working, you should submit a claim. The insurance carrier will thoroughly evaluate the claim and determine if the exclusion rider applied to your disability. The insurance company will request medical information to evaluate and determine whether the pre-existing condition is a contributing factor toward the disability. Your claim is either approved or denied based on whether or not the exclusion rider applies to your particular situation.
We understand that when the insurance company gets to “evaluate” whether or not the exclusion applies to your disability claim, it may seem a little worrisome.
This may seem a little worrisome, particularly the part where the insurance company gets to “evaluate” whether or not the exclusion applies to your disability claim. However, the condition described in your exclusion has to be the sole reason for you being on disability. The fact is, these are usually fairly cut and dry cases. Let’s consider a few examples:
- Scenario 1: One of my clients, an Orthopedic Surgeon, recently had a Cervical Spine exclusion rider on his policy for a herniated disc at the C6-C7 area. Disabilities resulting directly or indirectly from this existing medical condition, such as sprains, strains, herniated disc, degenerative disc disease, arthritis, etc., would generally fall under the terms of this exclusion rider and be excluded from coverage.
- Scenario 2: However, if an automobile accident caused fractured vertebrae or severe spinal cord injuries, and it was determined that the underlying pre-existing condition did not contribute to the disability, then the disability would be covered under the policy—assuming that all of the other terms and conditions for the disability policy were met.
- Scenario 3: What would happen if you suffer from two concurrent disabling conditions—one that is specifically mentioned under an exclusion rider and one that is not? If the covered condition alone renders you disabled, benefits would be payable assuming all other terms and conditions of your policy are met.
While you never want an exclusion rider (as this limits the strength of your physician disability insurance policy) sometimes it is the only option for getting disability coverage. When I purchased my disability insurance, for example, I was training for a marathon. During that time I had to see a physical therapist for a slight strain I was feeling in my left calf. I resolved that issue, completed my marathon, and completed the next one too! Healthy as can be, right? Unfortunately the underwriters didn’t think so and I had to include a “Left Calf Exclusion Rider,” for my policy.
Other times we are able to negotiate with disability insurance companies to avoid exclusions, such as in the above surgeon’s case. The point is, we treat everyone’s disability insurance application with the same level of diligence as we do with our own policies. If you are not certain to what degree your own exclusion limits your policy, or if you even have an exclusion rider, contact us today. We perform free disability policy reviews every day.