If you have shopped for a disability insurance policy, you probably know that most insurance companies limit claims relating to mental/nervous disorders to two years. I have often heard, “that’s unfair” from prospective clients and, while I understand my clients’ concerns, I can also look at it from an insurance company viewpoint.

When you file disability claims for most diseases, the medical department of the insurance carrier can review the diagnosis, blood tests, x-rays and any other diagnostic tests performed to arrive at the diagnosis. It is black and white and pretty difficult to refute. The insurance company MD might questions the claimant’s physician about some aspects of the diagnosis but for most claims, it’s fairly cut and dry.

However, such is not the case with Mental/Nervous claims. There are no tests that can corroborate the physician’s subjective diagnosis, which is typically based on his observation of the patient alone and does not include any blood tests, x-rays or other diagnostic tools used by most physicians.

The insurance company would have to take the physician’s word and base the claim on that alone. Basing claims on this type of diagnosis alone would leave the insurance companies wide open to paying fraudulent claims. Because of this potential for fraud, insurance companies have had to limit these types of claims to two years.