Disability Insurance Articles

Ways Disability Insurance Can Be Revoked By A Provider

2011-02-28

When searching for a disability insurance provider, you need to make sure that there are no ways that they will suddenly believe that they should act in a way that will lead to you having revoked disability insurance. This will give you piece of mind knowing that you will never find yourself bereft of coverage when you need it the absolute most.

The main way you can have your disability insurance revoked by a provider is to provide false information when you are first applying for it. They give you a quote based on the assumption that you are giving them true information. If you accept a policy knowing that you have lied to them and then are involved in an accident in which you need coverage, your policy will be eligible to be revoked. This is because they use the information you have given them to decide how much of a risk you are to the company to cover and then use that risk level to assign a price to you. For example, preexisting conditions have to be disclosed because that means they will definitely be paying for some of your medical coverage. Some insurance companies will not even offer coverage in the first place if you disclose this which unfortunately means that the more you disclose, the worse your odds of finding an insurer. But when you sign up for a policy, you are legally stating that the data you have given them is true. Insurance companies protect themselves from having to pay large amounts for those that they deem risky with these contracts.

If you are attempting to renew your disability insurance, you may be denied the chance to if you are currently receiving physical or mental counseling. They may view this as a sign that you are more of a risk to them because the therapy could indicate a state of weak health. Even though this therapy could be helping you actually avoid health problems in the future and could be helping you reduce the risk of later problems, health insurance companies might not look at it that way and revoke your ability to be insured by them.

Revoked disability insurance can also come if the insurer decides that you are able to work at 100% without any aid. There are often maximum time periods that an insurer will make payments, sometimes up to five years. But once that time period is up, they expect you to have either recovered or found another way to earn an income. Disability typically only covers about 60% of the income you would be generating as an incentive to keep you looking for work.