Why Do Insurance Companies Say You Are Disabled Due to a Psychological Disorder?

 

By Scott E. Davis, Disability Attorney

When people are unable to work and their short and/or long term disability claim is approved, the disability insurance company often uses a psychological diagnosis regardless of a physical diagnosis. This if often true even though you may have primarily physical diagnoses and have filed your claim on that basis. So, why would an insurance company do this? It is about saving a lot of money.

If your disability insurance is provided by your employer, regardless of the company which issued it (UNUM, Cigna, Prudential, Hartford, Liberty Mutual, among others), the policy will contain a “mental/nervous” limitation. The limitation will apply if the insurance company determines your inability to work is primarily due to a “mental/nervous,” aka psychological diagnosis. The mental/nervous limitation allows the insurance company to limit benefits to, at most, 24 months (and less often 12 months), based on its reasoning that with proper treatment and care, psychological disorders should not remain at a disabling level for many years.

However, the limitation has become a trap for the unsuspecting as many people with physical and psychological diagnoses are being approved solely on the psychological diagnosis so the company can eventually terminate benefits regardless of whether you remain unable to work due to your physical diagnosis.

However, the limitation has become a trap for the unsuspecting as many people with physical and psychological diagnoses are being approved solely on the psychological diagnosis so the company can eventually terminate benefits regardless of whether you remain unable to work due to your physical diagnosis.

Armed with the “mental/nervous” policy limitation, the insurance company has a financial incentive to “cram” as many claims as possible under it. This is true even though you and your doctors may believe you are unable to work due to a physical diagnosis and told the insurance company the same. Many people do not realize that the physical diagnosis you use to apply for benefits, and that your doctors agree is disabling, can be ignored by their insurance company.

The fact is that at some point, after suffering from chronic physical problems for years folks become depressed or anxious about their livelihood and future. When you are unable to work, have no income to live on and are stressed, it is easy to understand why you would be under care for depression and/or anxiety. Physical and psychological diagnoses frequently exist together and cause disability.

As a result, insurance companies often have 2 avenues to use to approve your claim and will choose the cheaper route if they can limit your benefits.

As a result, insurance companies often have 2 avenues to use to approve your claim and will choose the cheaper route if they can limit your benefits. Most physical diagnoses do not have a limitation on benefits and potentially pay to the maximum policy date (i.e. 65 or 66 years of age) if you are unable to work for that long. A disability claim based on a physical diagnosis is often worth hundreds of thousands of dollars while a psychological claim is worth tens of thousands!

If your disability claim is based primarily on a psychological disorder, and that comprises the majority of your treatment, it is understandable that an insurance company will apply the limitation.

Simply put, you and your doctors need to be very clear that your primary disabling diagnosis(es) are physical and not psychological; this is true even if you are receiving treatment and taking medication for your psychological diagnosis(es).

However, if you and your doctors believe you are unable to work primarily due to a physical diagnosis(es), then your short and/or long term disability application, the forms you complete for your claim, your doctor’s forms and medical records must document this so you can try to avoid the “mental/nervous” limitation. Simply put, you and your doctors need to be very clear that your primary disabling diagnosis(es) are physical and not psychological; this is true even if you are receiving treatment and taking medication for your psychological diagnosis(es).

In conclusion, understand that you will not be able to dictate to your insurance company what diagnosis it uses to approve your claim. However, but by being aware of the limitation and carefully presenting your disability claim as being based on a physical diagnosis, you will have a much stronger basis to appeal at the appropriate time.

© 2015  Scott E. Davis, Disability Attorney