Understanding disability insurance with pre-existing conditions
If you’re thinking about purchasing disability insurance but don’t think you’ll be eligible due to a pre-existing illness or injury, you’re not alone. Many people believe they can’t qualify for coverage – but in many cases, they can qualify for coverage with a pre-existing condition. However, the process of getting a policy may be a little more difficult or costly.
If you’re concerned about how a disability could impact your life, it may well be worth a little extra effort. After all, the Social Security Administration (SSA) estimates that one in four 20-year-olds will experience a disability for 90 days or more before they reach age 67.1 Plus, only 38% of initial applications for Social Security Disability Insurance (SSDI) are approved.2 And, even if approved, the average SSDI benefit for 2024 will be just $1,537 per month.3 The reality is, if you rely on your income to pay living expenses – and have dependents who also rely on you – a private long-term disability insurance policy could be key to maintaining your lifestyle if illness or injury keeps you from working for an extended time. This article can help by telling you about:
Illnesses and injuries qualify as pre-existing conditions
How a pre-existing condition may affect disability coverage
How to secure a disability policy despite having a pre-existing condition
Which illnesses and injuries are considered pre-existing conditions?
While specific underwriting guidelines regarding pre-existing conditions differ from insurer to insurer, there are certain basic guidelines that are common to most disability insurance companies. Generally speaking, they define a pre-existing condition as any permanent medical condition that existed before you applied for disability insurance.
Will your specific pre-existing condition prevent you from getting coverage? That will typically depend on several factors, including:
Your exact diagnosis
How serious the condition is
When you were diagnosed or became symptomatic
What kind of medical treatment you’re receiving
The medication or treatment is required to control it
Perhaps surprisingly, a recently diagnosed condition is often more of an issue than a longstanding condition. Why? If a condition has been well managed for many years, there may be less uncertainty and risk in insuring a person. That said, some of the more common pre-existing conditions that are likely to prevent a person from securing coverage include:4
Kidney disease
Parkinson’s
Cancer
Blood disorders
Hepatitis
Multiple Sclerosis
Arthritis
Because they can affect your ability to work, insurers may also hesitate to issue coverage if you have common pre-existing conditions such as chronic back pain, anxiety or depression, a history of broken bones, carpal tunnel syndrome or asthma.5 It’s also important to note that there are other conditions that may make it difficult for you to secure disability insurance, but they tend to vary by insurance company.
Not all pre-existing conditions are treated the same
Assuming that they are well-managed when you apply for your policy, some pre-existing conditions are less likely to prevent you from securing disability insurance. These can include:4
Ulcerative colitis
Lupus
Diabetes
Sleep apnea
Certain mental disorders
Some insurers may even approve an applicant who’s been diagnosed with cancer if they’ve been in remission for the requisite number of years. Again, underwriting guidelines differ from insurer to insurer, so it may take a little time and effort to find the one that can best meet your needs.
If you get coverage, a pre-existing condition could affect the terms of your policy
How do disability insurance policies issued to those with pre-existing conditions differ from policies issued to those with no pre-existing conditions? Specifics differ from insurer to insurer, but in general, here are some issues to be aware of:
Most insurers will view a pre-existing condition as an added risk factor, which often translates to somewhat higher rates.
An insurance company will typically (but not always) impose an exclusion for a pre-existing condition, meaning that they will deny your disability claim if you are unable to work due to that pre-existing condition. However, you will still get benefits for any other covered condition.
Rather than excluding a pre-existing condition, an insurance company may impose a waiting period on claims related to that condition. So, for example, instead of a typical 6-month waiting period for long-term disability benefits to start, you may be required to wait 12 months for benefit payments.
Depending on the nature and severity of your pre-existing condition, an insurance company may limit the term (length) of your policy. If you want to purchase new coverage at the end of the term, you will probably have to go through a new underwriting process.
While many exclusions or limits will be permanent, but others may be eligible for review at some point. If the insurer feels that the condition is no longer a high risk, they may remove the exclusion.
Despite these potential limitations, it is important to remember that disability insurance will cover you should you be unable to work due to any illnesses or injuries unrelated to your specific condition. So a policy can still be an important way to help protect your financial well-being. Just be sure to carefully review all policy terms and conditions with your agent or financial professional, as coverage limitations and exclusions related to specific conditions can be somewhat complicated and vary among insurance providers.
How can someone with a pre-existing condition get coverage?
If you’re willing to do some extra shopping around, it may not be as difficult as you imagine. Here are some options and tips that you might want to consider:
Contact or research several insurance companies: While some insurance companies may deny you coverage due to your pre-existing condition, others may offer you a policy. Remember, underwriting guidelines differ from insurer to insurer.
Find out if your employer offers group coverage: Many employers offer group disability benefits as part of their employee benefits package, at least for short-term disability insurance. These plans may not require a medical exam or ask you to submit medical records, making them more accessible to those with pre-existing conditions.
Look for specialized coverage: Specialized products such as guaranteed issue disability insurance - may be an option for those with pre-existing conditions, although they often feature higher premiums and limited benefits.
Think about your professional or trade association: Some professional or trade associations offer group disability insurance plans to their members. For example, it’s how many doctors in private practice get physician disability insurance. These group plans may also be more lenient regarding certain pre-existing conditions.
In many ways, getting disability insurance with a pre-existing condition is like getting life insurance. While your premiums may be somewhat higher and there may be coverage limitations, in many cases, you will be able to get a substantial level of coverage at an affordable cost. But it's important to work with an insurance professional who can explain all the options available and carefully review the terms and conditions of the policy with you before purchasing.
Why so many people choose Guardian for individual disability insurance
Investopedia named Guardian the Best Overall Disability Insurance Company for 2023 because of our wide range of plans and options to meet the needs of individuals and businesses. The fact is, we have more experience than most: Guardian has been helping families protect their financial well-being for over 160 years. With high scores for financial soundness from independent rating agencies7, our 12 million customers can trust us to be there when they need us most.
If you are interested in getting disability coverage, a Guardian financial professional can help you explore the options and guide you to coverage that fits your situation. Here’s how to find someone near you: