If you read the fine print for any insurance policy, you will notice a section on exclusions. These are situations that the insurance company does not cover and will not pay a benefit. Disability insurance is no exception, and anybody who owns or is considering purchasing it should be aware of its exclusions. Below are some of the typical disability insurance exclusions found in policies.
Disability insurance exclusions
No benefits will be payable and no premium will be waived if the disability results, directly or indirectly, from any of the following causes:
Normal pregnancy or childbirth: However, the insurance company will not exclude a disability which results from a complication of pregnancy, including but not limited to extra-uterine pregnancy, pernicious vomiting, post-partum hemorrhage, and toxemia.
An act of war and any hazard arising from war: As an act of war will dramatically increase the likelihood of disability (and death), it is specifically excluded in both life and disability insurance policies.
Surgery to transplant an organ: Disabilities that result from the transplant of an organ or any other part of the insured’s body to the body of another person is excluded, except as provided under the transplant surgery benefit provision.
Incarceration: No disability benefits for any period while the insured is incarcerated in a penal institution or government detention facility.
Dangerous avocations: Amateur athletes competing in hazardous sports will be accepted at standard rates with an exclusion rider for any disabilities resulting from their participation in that sport. Disabilities resulting from hazardous activities such as automobile racing, hang gliding, contact football and hockey, martial arts, mountain climbing, rodeo events will be excluded.
Foreign travel: Depending on the country of origin and travel history, a foreign travel exclusion may apply. Because of political instability, living conditions and the threat of terrorism in some countries, insurance companies typically have exclusions for both life and disability insurance for these countries.
Besides these exclusions, certain occupations are also uninsurable for disability insurance. For instance, pilots, flight attendants, musicians and models work in occupations that have unusual physical hazards or have a high degree of job instability. There may also be exclusions for certain causes of disabilities, depending on the medical history of the applicant.
It may seem like exclusions only benefit the insurance company by letting less claims be approved, but they also help insureds in a big way. With less claims being paid, insurance companies will be able to pass the savings off to consumers in the way of lower premiums, with the result being that everybody benefits.
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