Limitation provisions are present in many long-term disability insurance policies. These limitation provisions reduce the amount of benefits a person may be entitled to, if they meet the limitations. A good example of one of these provisions is the mental health or nervous disorder limitation (“MNL”). The exact wording of the limitation provisions varies depending on the policy. However, generally, they limit the amount of benefits payable if a disability is caused, or contributed to, by a mental health condition or a nervous disorder.
This type of limitation significantly reduces the amount of benefits an insurance company would need to pay out over time. If the limitation applies, the insurance company will only need to pay benefits for 12-24 months (the exact time period varies by policy).
Because of this, insurance companies often try to stretch the mental health or nervous disorder limitation to apply in cases where it should not apply. Courts are becoming more and more aware of this move by the insurance companies and are rejecting it.
This limitation is especially tricky when a person who suffers from both mental and physical disabilities is applying for disability insurance benefits. The insurance company will try to apply the limitation since there is a mental component to the disability, even though the physical disabilities are enough to leave the person totally disabled.
The disability insurance company cannot simply choose the conditions that costs them the least amount of money. They must first look to see if the physical conditions themselves cause total disability. If they do, the mental health limitation cannot apply even if the person suffers from mental health conditions.
It is important to be on the lookout for this type of overuse of policy limitations by insurance companies. Just because your claim is approved does not mean the insurance company is paying you what you are owed. An experienced long-term disability insurance attorney can help with your disability claim and appeal to ensure you get the most out of your policy.