Understand Your LTD Policy’s Exclusions and Limitations

Most long-term disability (LTD) policies contain exclusions for pre-existing conditions, i.e., illnesses or conditions that occurred or developed in the past.  These conditions are generally defined on a timeline that extends a certain amount of time from the date the physician purchased her LTD insurance looking forward, as well as a period looking back. 

Pre-Existing Exclusions

Looking Forward Exclusion – Disabilities Claimed in the First Year

Typically, any condition for which a physician claims long-term disability (LTD) benefits less than one year (some policy periods are longer) from the time the physician purchased LTD insurance will be suspect as pre-existing and may be denied.  An example: Surgeon Smith purchased LTD insurance on January 1, 2023.  In May of 2023 she starts to develop pain in her lower back that begins to interfere with her work.  She seeks treatment and is diagnosed with degenerative disc disease in her lower back.  As a result of this developed disability Surgeon Smith is no longer able to perform the long spinal operations that previously defined her career.  Because the disability was claimed less than one year after Surgeon Smith obtained her LTD insurance, her LTD carrier will rigorously scrutinize Smith's medical records and may exclude her condition as pre-existing because it arose less than one year after she obtained her policy.

Looking Back Exclusion – Disabilities Present Three Months Prior to the Policy Inception

long-term disability insurance claim

In addition to the rigorous scrutiny of Surgeon Smith's medical records in 2023, her LTD carrier will also “lookback” over a period of time (typically three months) before Smith obtained her LTD benefits, January 1, 2023, to see if any records indicate she had reported any back pain or symptoms in the three months before her policy inception date—October 1, 2022 to January 1, 2023.  If Smith's records contain any indication that she was suffering from back pain, or had been prescribed treatment or medication for back pain, prior to the date she obtained her LTD benefits, the carrier may deny the claim claiming the degenerative disc disease pre-existed the inception of her policy.  This can occur even for conditions Surgeon Smith may not have even known she had if the records support it was present in the three months before her policy inception date.

Mental Health Limitation

Most LTD policies either exclude altogether mental health disabilities or, commonly, limit benefits they will pay for mental health disabilities to a period of 24 months total, depending on the policy.  Meaning, benefits for mental health conditions such as anxiety, depression, or bipolar disorder will only be paid for 24 months.  After two years, the benefits will cease.  Note that depression or anxiety can develop as the result of a disability or injury.  It is not uncommon for LTD carriers to try to classify the disability as purely mental so they can limit the benefit period according to the policy's mental health limitation. 

Soft Tissue or Self-Reported Symptoms Limitation

LTD carriers are not fans of conditions or disabilities that cannot be documented and quantified in medical records or medical examinations.  These may include mental health impairments, as discussed above, as well as soft-tissue injuries or conditions such as fibromyalgia.  For this reason, many LTD carriers limit the coverage they will provide for soft-tissue or self-reported symptom conditions such as these to a period of only 24 months. 

Read Your Policy Carefully Before Filing a LTD Claim

Before filing a claim for LTD benefits, it is in your best interest to obtain a complete copy of your LTD policy and review it carefully so you understand what LTD coverage you have, how your own occupation is defined, and what exclusions or limitations may apply to your claim for LTD benefits.  Knowing these things in advance will help ensure you file a LTD that accurately reflects your disability, and your symptoms and limitations, and avoids a denial based on an exclusion or limitation in your policy.

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