We find that many people assume that they cannot claim an insurance benefit because of a pre-existing condition exclusion. This is incorrect. In short, the insurer must prove that these exclusions apply and this can be difficult for them to do.
Whilst many policies of insurance covering injury, illness or death, including TPD, income protection, trauma and life insurance, contain either a broad pre-existing condition exclusion or a pre-existing condition exclusion, these exclusions do not apply to a majority of insurance claims. Also, even if the exclusion does exist in your insurance policy, it may not affect the claim in the way that you think it will.
It is helpful to be aware of pre-existing exclusion clauses as they can sometimes be raised by an insurer during the assessment of your disability insurance claim. For example, the insurer may argue that they are entitled to historical medical records to determine if a pre-existing condition exclusion applies to a claim. There are other reasons that your medical records might be requested, too.
If this happens to you, it is important to get legal advice about your options.
Broad pre-existing condition exclusions
Policies that are applied for directly with an insurer, as opposed to, for example, insurance provided through your super) may contain a broad pre-existing condition exclusion. This could be for TPD, income protection, trauma and life insurance policies.
These broad exclusions generally state that a claim for a condition may be declined by the insurer if there were symptoms of the condition before the policy started.
Sometimes, if a condition is disclosed to the insurer when a policy of insurance is applied for, they may agree to cover this pre-existing condition in the future (this would usually be mentioned in the relevant part of the policy). Accordingly, any broad pre-existing condition exclusion may not apply.
If a pre-existing condition was not disclosed to the insurer when a policy of insurance is applied for because the person wasn’t aware of the condition, it may be possible to argue that a pre-existing condition exclusion does not apply. This is a very important point to note, and if your insurance has been denied on this basis, you should seek legal advice immediately.
A pre-existing condition exclusion under a superannuation insurance policy may only apply in limited circumstances
A pre-existing condition exclusion under policies that are provided automatically by your superannuation fund (we sometimes call this default insurance) may only apply in limited circumstances, including the following:
- If your work hours or duties were limited because of a medical condition when your cover started; or
- If you were in receipt of income support benefits like Centrelink, WorkCover or income protection when your cover started; or
- If you only worked for a short period (i.e., less than 30 days) when your cover started.
Under superannuation insurance policies, if any of the above circumstances apply when cover starts, the ‘At Work’ or ‘Active Employment’ eligibility test may not be met under the policy. As a result of this, cover may be ‘Limited Cover’ and may not cover pre-existing conditions.
If circumstances change after cover starts, the ‘At Work’ or ‘Active Employment’ eligibility test may be met later, and Limited Cover may become standard cover, which covers pre-existing medical conditions.
Even if a pre-existing condition exclusion applies to a superannuation insurance policy, if a person wasn’t aware of the condition, it is possible to argue that a pre-existing condition exclusion does not apply.
Insurers may ask you for historical medical records during your claim
As the insurer must prove that a pre-existing condition exclusion applies, they may request copies of medical records from before a policy started.
Those medical records may reveal that there were symptoms of a medical condition before the policy started. The insurers may try to rely on these medical records to argue that a claimed medical condition is pre-existing and decline the claim.
If the policy of insurance was applied for, the insurer may also try to rely on these medical records to decline your claim due to non-disclosure.
We recommend getting legal advice about requests for historical medical records before you provide any, as it may be possible to argue the insurer is not entitled to them.
Get help from a disability insurance lawyer
It is important to get advice about your insurance cover or claim as early as possible. We can advise you whether a pre-existing condition exclusion may apply to your claim or not during our free enquiry process.
We are experts at TPD, income protection and other disability insurance claims and can assist you to maximise any entitlements. We provide free advice and run claims on a ‘no win, no fee’ basis, so it costs you nothing to find out where you stand.
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