Disability Insurance Articles

Reasons For Disability Insurance To Be Revoked

2010-10-12

Disability insurance can be an effective way to deal with an injury or illness that forces an individual to lose income. Good disability insurance quotes will provide enough coverage at a low enough premium that clients can feel both protected in the event of injury or illness and secure in the knowledge that they are not paying too much for coverage. However, while disability insurance can be an excellent way to provide for an individual or family in the event of an injury or illness, there are certain requirements that clients must be aware of, or else, they might risk revoked insurance. Here are a few situations that could lead to a revoked insurance policy.

The first and most common cause for a revoked insurance policy is fraud. This typically occurs when an individual who is injured claims greater damages than have actually occurred. For example, he or she pretends that a neck or back injury is more debilitating than it actually is-and then proceeds to perform activities that are against doctor's orders and could not be performed if he or she was truly as disabled as claimed. If insurance companies suspect that a client is not being truthful, they will take steps to observe the client in their home environment through both obvious and subtle means, and if they can determine that the customer is not being honest about the injury, both revoked insurance and possible criminal charges can result.

Another way in which disability insurance can be revoked is less sinister but still results in a loss of coverage. This occurs when a disabled worker chooses to go back to work because they are "feeling well enough." In this case, he or she is not attempting to be deceptive, but feels guilt about not working and the financial stress of not having a full income. Unfortunately, clients often forget to notify their disability insurance company about their return to work and continue to collect disability payments at the same time as earning a regular wage. If a company discovers this, it will almost certainly revoke a customer's disability insurance and may pursue other charges. This will make getting any future disability insurance quotes difficult as there will be a record on file for a cancellation of the policy due to a contract violation.

While this can sound frightening, all clients need to remember is to be very clear with their insurance company about any changes in their status and never to lie about any injury or condition, no matter what the reason. So long as the truth is told and the provider is kept updated, a client should have no issue with revoked insurance.