That our medical people are getting sick and dying from coronavirus in their attempts to save others is not an exaggeration.
Doctors, nurses, and practitioners on the front line of the COVID-19 battle come face to face with the potential for their own infirmity and death. This is every day for them. Will they be the next one to catch it? Are they bringing this virus into their homes, to their families?
Physicians and health care workers know more than most how fleeting life is. With the coronavirus pandemic, this knowledge weighs heavy. Their new reality is causing many medical professionals to turn inwards and put their most important documents in order – including their disability and life insurance policies.
Medical Professionals’ Questions about Disability, Life Insurance during COVID-19 Pandemic
Certainly insurance claims will increase, especially for disability and life insurance during the COVD-19 pandemic. How the insurance industry holds up during the unfolding crisis remains to be seen. The ability of every disability or life insurance company to manage pandemic risk will be felt by our belabored medical force.
They want to know,
- Does life insurance cover COVID-19?
- I don’t have a disability policy. If I purchase one, would I be able to file a claim if I contract coronavirus?
- I’ve been diagnosed with coronavirus. If I become too sick to work, when can I apply for disability?
- The insurance company is stonewalling my disability claim, telling me things are “on hold.” What can I do?
In light of these and other questions, the following information and resources will help clarify what concerned medical professionals need to know about their disability or life insurance coverage, and how carriers are likely to address the coronavirus issue.
As each policy and claim is unique, we only cover these insurance issues generally here. If you have need for a disability or life insurance COVID-19 analysis, we welcome your call or online request for a free legal consultation with an experienced attorney. We are available 24/7.
Long-term Disability Insurance
First, a quick refresher about disability insurance policies. As a general rule:
- If you purchased your insurance policy from an insurance agent, your policy is considered a private, or individual disability insurance (IDI) policy. Like other legal contracts, IDI policies are regulated under state insurance laws and subject to breach of contract, bad faith, and other causes of action.
- If your policy was obtained through an employer-sponsored group benefits plan, such as a hospital or clinic, that is considered a group disability plan and is governed by federal law known as ERISA (and therefore do not fall under state contract laws).
- Your disability policy may be a physicians’ or nursing association’s group disability insurance plan (such as policies available to members of the AMA.) These plans may or may not be governed by ERISA.
- You may have supplemented your group plan or association plan with IDI.
- When you file a claim for either IDI or group disability benefits, other insurance programs may play a role in your claim as well, such as Social Security Disability or worker’s compensation.
In every case, a policy review is necessary to advise on any contractual or ERISA regulations with regard to your specific coverage.
Individual Disability Insurance (IDI) Questions about Coronavirus
Q: If I contract coronavirus, am I eligible for benefits under my Individual Disability Insurance (IDI) policy?
A: Yes, you can file a long term disability claim and your insurance policy should cover COVID-19 in the same way it would cover any other established illness. Each policy has a definition of disability; that is what must be satisfied for you to collect the policy’s benefits.
The insurance carrier is going to investigate the following things:
- What your IDI policy’s definition of disability is;
- What the duties of your occupation are;
- If you contract the coronavirus, how does that affect your ability to complete those duties, and for how long?
Know Your IDI Policy Definition of Disability
Most doctors’ and RN’s disability policies are written to contain what is called an “own occupation” definition of disability. Because doctors and nurses are often specialized, a true own-occupation policy provides the maximum amount of protection:
True own-occupation means that the insurance company would consider you disabled if you are unable to perform the material and substantial duties of your occupation (medical specialty), AND you will still receive all benefits even if you go to work in another occupation or specialty.
NOTE: This definition differs greatly from group policies, which generally contain the hard-to-meet “any occupation” definition, where you are unable to perform any job, in or out of your profession.
And while they may be labeled as such, not all “own-occupation” policies are equal. There are variations of the own occupation definition, including hybrids of own occupation and any occupation definitions of disability.
You can learn more about how Own Occupation definitions of disability work in our Individual Disability Insurance (IDI) Denial and Litigation section.
You must get past your IDI policy’s elimination period.
Disability policies have an elimination period (a.k.a. waiting period) to get through before you are eligible to receive benefit payments. You cannot purchase disability insurance today and turn around to file a claim next week, whether for coronavirus-related illness or a back injury. Policies with shorter waiting periods will maximize benefits if you get the coronavirus.
Therefore, if (1) your illness lasts beyond the policy waiting period, and (2) the insurer is convinced that you meet the definition of disability stated in your policy, benefits would start once the waiting period ends.
Waiting periods for long term disability insurance policies can range from 30 to 90 days up to two years—and usually correspond to the length of your short-term disability benefits. Waiting periods for short-term policies may range from a week to 24 months.
Be Aware of Any IDI Policy “Exclusions and Limitations” Provisions
Disability insurance policies often contain exclusions, limitations and reduction-of-benefit provisions. A common example is the preexisting medical condition exclusion, where an insurer adds wording to your policy stating that you will not receive benefits due to certain conditions, or impairments caused by certain activities.
While IDI policies generally do not exclude pandemics or are ambiguous on this point, it may be a factor going forward. Each policy should be considered independently and carrier to carrier.
Periods of Social Quarantine or Furlough Are Not Considered in Disability Insurance Policies
Being unable to work for a reason that does not involve a medically disabling illness or injury—such as social quarantine—would not qualify a person for IDI benefits.
Group Disability Questions about Coronavirus
If your disability policy is paid or offered through your hospital or clinic as an employee benefit, it is likely a group disability insurance policy. Many employers offer both short term and long term group plans.
Q: Does my group short term disability (STD) insurance policy cover coronavirus?
A: If you are diagnosed with coronavirus and become unable to perform the duties of your occupation, short term disability would generally pay full STD benefits, once the waiting period has been met. If you are quarantined with no diagnosis and you are not ill, you would not be eligible for STD benefits. Again, the pivotal factor with disability insurance, whether short or long term, is that you are medically unable to work.
Some group short-term disability policies may have a quarantine rider that may provide benefits in a quarantine situation and under your treating doctor’s orders.
Q: Does my group long term disability (LTD) insurance policy cover coronavirus?
A: Once short-term benefits expire and you remain too sick to work, long term disability coverage will generally cover you if you continue to meet the definition of disability, and the LTD policy’s waiting period has been met. You will need to apply for LTD benefits with a new application.
Be prepared in this stage of your claim for a big change to occur in the definition of disability. At the 24-month point, group LTD plans typically change the definition of disability from own occupation to “any occupation”—meaning if the insurance company says that you are able to work at any job, your benefits will be denied or terminated.
Medical professionals often have more than one LTD policy.
Physicians and nurses will often supplement a group disability policy with an individual policy or with an association disability plan. This provides coverage that is more specific to your occupation, may be portable, and may increase your overall benefit. Watch out for important caveats and nuances in the law when dealing with group association policies and group policy from your employer.
For more information on how individual, medical association, and group disability claims are handled and regulated by different laws, and what to do if your claim is denied, our free Disabled Doctor’s Guide will prove to be a comprehensive resource.
Life Insurance Questions about Coronavirus
Doctors and nurses are looking for a more permanent solution to help their family members financially. Life insurance covers your life and provides a payment to your beneficiary upon your death.
A March 19, 2020 article in The Hill reports that “life insurers in the U.S. are imposing 30-day waiting periods for applicants who have recently visited regions hardest hit by the coronavirus pandemic.”
As a rule, the U.S. life insurance industry is well-capitalized, and therefore is reacting from a fairly solid footing to the pandemic. However, life insurance companies face huge challenges as volatility in financial markets is expected to escalate.
Questions from our medical friends and clients include:
Q: Will my current life insurance policy cover coronavirus if I die from COVID-19?
A: In the hundreds of life insurance policies we have reviewed, we have not seen a policy that excludes pandemics. So as a current policyholder, if you die of a coronavirus-based illness your policy’s death benefit should be honored in good faith and fully paid out to your beneficiary. Under an existing policy, the death benefit should not be affected by prior travel to areas known for coronavirus exposure.
Q: I do not have life insurance. If I buy a life insurance policy now would my coverage include death benefits for Coronavirus?
A: New applications during the COVID-19 outbreak are another matter. Industry experts expect that insurance companies are already launching stricter underwriting of life insurance policies, with exclusions for a pandemic. Life insurance carriers are also likely to increase premiums to mitigate expected losses during an intense financial market decline. Some may temporarily stop taking applications.
Conversely, other market reports say that now may be time to buy life insurance policies, but to “do it quickly.”
What we can say with assurance to doctors and nurses who are earnestly considering a new life insurance policy during this pandemic, is that you should
- read and understand all terms, provisions, and exclusions within the policy, and
- be very honest and errorless in your application for life insurance regarding your background, health, and any past or future travel plans. The reason is to avoid what is known as material misrepresentation and the period of contestability.
Material misrepresentation is when you (the policyholder) either intentionally lie, conceal information, or make an error filling out the initial form. No matter how small it may seem, any untrue statement or error can be significant — i.e., material — in that, had the insurance company known the truth, it would have refused to issue the policy to you.
When you fill out a life insurance policy, the standard that applies is utmost good faith. That means the insurer assumes you will be strictly honest. It’s not cost-effective for the insurance company to check all answers at the time an application is submitted. Insurance companies only investigate the truthfulness of your statements when the beneficiary files for a death benefit. If the company finds a material misrepresentation on the policy, it will likely void it and deny the claim.
“Death Occurred During the Period of Contestability”
Your policy will have a “contestability” clause, usually one or two years, during which the insurance carrier will investigate your (the deceased insured’s) background information.
Denials based on material misrepresentation can only be made if the policyholder dies during the period of contestability. If your death occurs within those first one or two years from the date your life insurance policy goes into effect, the carrier has the right to contest the claim.
For example, suppose you are diagnosed as having a medical condition such as COVID-19 and are within the contestability period. On your application, you did not disclose this fact during the underwriting phase. The unadmitted medical condition can result in a material misrepresentation investigation where the insurance company has cause to rescind (void) your policy.
For more information on the legal matters of life insurance, our Life Insurance Claims Kit is a free, downloadable ebook that answers many questions about these policies and claims.
Legal Advocates for Disability & Life Insurance amid COVID-19 Crisis and Beyond
The attorneys and staff at Marc Whitehead & Associates are here to help in legal matters regarding disability insurance and life insurance COVID-19 claims. Like all Americans, we have family and friends who are doctors, nurses and healthcare workers serving our communities in ways we can never repay.
If you need answers about disability and life insurance COVID-19 claims, we are here to provide the answers you need.
If an insurance company has delayed or denied your life or disability insurance claim and is blaming their actions on this pandemic, we will fight to get you the full policy amount.
We are a national law firm designed to work remotely and uninterrupted during this current crisis. Our office is prepared to provide 100% service to anyone from anywhere—especially in times like these.
The best way to effectively deal with matters of disability or life insurance COVID-19 coverage is to get out in front of them and stay as legally protected as possible. We can help.