Underwriting Disability Insurance with Mental Nervous Disorders
When considering disability insurance, most people think of coverage for physical injuries or illnesses that prevent them from working. However, mental and nervous disorders (MNDs) also play a significant role in an individual’s ability to maintain employment. The Social Security Administration reports that 35% of disability insurance beneficiaries are due to MNDs. With the increasing awareness of mental health, the importance of understanding how disability insurance covers MNDs cannot be overstated.
The Importance of Disability Insurance for Mental Health
Disability insurance provides financial support if your client becomes unable to work due to illness or injury. Mental nervous disorders, which include conditions like depression, anxiety, bipolar disorder and post-traumatic stress disorder (PTSD), can be just as debilitating as physical conditions. These disorders can significantly affect a person’s cognitive function, emotional stability and overall ability to perform work tasks.
Challenges in Underwriting Mental Nervous Disorders for Disability Insurance
When it comes to underwriting disability insurance, mental nervous disorders present unique challenges. Insurance companies assess risk to figure out the likelihood of a claim being made. Due to the subjective nature of mental health conditions and their varying degrees of severity, insurers often approach MNDs with caution.
- Pre-existing Conditions: If your client has a history of mental nervous disorders, insurers might consider this a pre-existing condition, which could affect the policy’s terms. Some insurers may impose a waiting period, exclude coverage for MNDs or charge higher premiums.
- Disclosure: It’s crucial to fully disclose any history of mental health issues during the underwriting process. Insurance carriers have access to detailed medical history during underwriting. Failure to disclose could result in denial of coverage or claims later. Insurers typically require detailed information about past diagnoses, treatments, medications and hospitalizations.
- Policy Limitations and Exclusions: Disability insurance policies often have specific limitations or exclusions related to MNDs. Some policies may cover mental nervous disorders for a limited period, such as two years, while others may exclude them altogether. It’s essential that your clients review their policy carefully to understand what is and isn’t covered.
- The Stigma Factor: Unfortunately, despite growing awareness, there is still a stigma associated with mental health, which can influence how insurers view these conditions. This stigma can sometimes lead to stricter underwriting guidelines for applicants with a history of MNDs.
Tips for Securing Disability Insurance Coverage with Mental Nervous Disorders
- Shop Around: Different insurance companies have varying approaches to underwriting mental nervous disorders. It’s wise to compare policies from multiple insurers to find the one that offers the most comprehensive coverage for your clients’ needs. Dibroker West works with multiple insurers and our diCoaches can help find the best coverage for your client.
- Work with a Specialist: An insurance broker or agent specializing in disability insurance can be invaluable. They can help you navigate the complexities of underwriting and find a policy that offers adequate coverage for MNDs. dibrokerWest has been a top disability insurance brokerage for more than 20-years so you’re in the right place!
- Consider Group Policies: Employer-sponsored group disability insurance plans often have less stringent underwriting requirements than individual policies. If you have access to a group policy through your employer, it might be a good choice for securing MND coverage. There are often multi-life options with many carriers that can also ease underwriting requirements.
- Maintain Regular Treatment: Consistent treatment and management of mental nervous disorders can positively influence underwriting decisions. Demonstrating that your condition is well-managed can increase the likelihood of securing favorable terms.
- Appeal and Negotiate: If you’re initially offered a policy with exclusions or higher premiums due to a history of MNDs, don’t be afraid to appeal the decision or negotiate. Providing more medical documentation or working with your healthcare provider to present a comprehensive picture of your mental health can sometimes lead to more favorable outcomes.
Conclusion
Underwriting disability insurance with mental nervous disorders can be complex, but it’s not impossible. By understanding the process, being transparent about your medical history and working with the right professionals, you can secure a policy that provides the protection you need. Mental health is just as important as physical health and having the right disability insurance coverage can offer peace of mind in an uncertain world.
For more information about disability income insurance with mental nervous disorders, please call your local Regional Sales Reps for details!
