When I meet with a client, I will ask not only their title at work, but will query about their daily duties and activities, as well.  I sometimes get interesting answers like, “I’m the boss,” or I’m an executive.  The insurance company will always ask me to go back to my client to get more information, if that’s the job description on the application.

We have a quote request form on ProtectYourIncome.com that people can submit to request a quote.  It’s very difficult for us to respond if someone answers, “manager,” or “independent contractor,” for example.  There’s no way we can offer quotes and, certainly, no way the insurance company would offer a policy without more specific information about the person’s occupation.

It behooves you to be as specific as possible about your duties and the percentage of time spent on each, because if you had to submit a claim, the insurance company would be able to more easily determine whether your illness or injury affected your ability to work at your job.

And, “Unemployed,” by the way, is not an occupation.  It’s amazing how many quote requests we get like this.  Disability insurance is meant to (partially) replace your income if you can’t perform the duties of the occupation (you’re working a)t due to illness or injury.

The wording of preexisting conditions exclusions is typically fairly general (e.g. lower back, as mentioned above) and is often an area of concern for policyholders.  While the concern is understandable, it’s important to understand why the exclusion is worded so generally and how the insurance companies adjudicate claims having to do with the exclusion.

Exclusions, like other policy language, have to be filed with each state’s insurance commission.  If each possible exclusion was included, the list would be far too long.  Therefore, “lower back” can include all the discs in the area, surrounding muscles and tendons, etc.

When evaluating a claim for benefits, an insurance company will determine if the medical concerns that necessitated the exclusion have any effect on the claim.  Specifically, they will determine if the preexisting condition is a contributor to the current disability.  For instance, a recent car accident would be looked at as the reason for the disability, even if there were lower back problems previously.  If preexisting history is, in fact, a contributor to the current disability, benefit would not be paid.

There are many causes of disability and, even with one exclusion, disability insurance, should be an important component of any financial plan.