Disability Insurance | When a Diagnosis Occurs

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I had a long time client contact me today with some news. His sister was just diagnosed with Parkinson’s Disease. Furthermore, his son was just diagnosed with a tremor. After further investigation, he discovered he has a high probability of getting Parkinson’s Disease in the future.

This client is a surgeon who purchased their life and disability insurance over ten years ago. They currently have over $5,000,000 of life insurance and $20.000/month disability benefit. He wanted to know how his potential diagnosis will impact his insurance.

The good news is that his original policies were purchased more than ten years ago, well after the two year period of incontestibility. At the time he applied for coverage, he did not have any diagnosis or symptoms. Therefore, he would be covered if he could no longer perform surgery.

More good news is that he purchased his disability insurance from more than one company. This allowed him to be pre-approved for up to $35,000/month benefit. Had he only purchased benefits from one company, he would have been limited to $15,000/month benefit.

If he were to go out and apply for coverage at this time and go through the medical underwriting process, there is a chance the company could decline him or add an exclusion rider on the policy.

The lesson to be learned is to purchase benefits as early as you can when you are healthy and have as many increases available that do not require further medical underwriting.

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