Hiding a Condition on Your Disability Insurance Application May Affect Your Benefits
In Illinois, and elsewhere, it’s critical that disability insurance policyholders avoid misrepresenting the truth on their application. It’s worth noting that your application for disability insurance policy will typically require that you confirm the truth and accuracy of all statements made in the application.
Failure to adequately and accurately represent the facts on one’s application may be used later on by the insurer as a justification to deny an otherwise legitimate disability benefits claim — the insurer will likely argue, for example, that they are entitled to rescind the insurance contract as a consequence of the misrepresentation at issue.
You may be wondering: what happens if you made a mistake on your disability insurance application? After all, your claim for disability benefits may still be legitimate, even if there were mistakes (or misrepresentation) made in your original insurance contract. Fortunately for disability policyholders, there are a number of protections in place to ensure that you can secure benefits and avoid the rescission of a valid insurance contract.
Misrepresentations Will Not Necessarily Void a Policy
In Illinois, section 154 of the Insurance Code governs the circumstances under which an insurer may be entitled to rescind a policy. Specifically, the insurer may only rescind a policy (and thereby avoid having to payout benefits) if they can show that:
- The misrepresentation was written into the insurance contract/application itself;
- The statements made by the policyholder are demonstrably false and were intended by the policyholder (for a deceptive purpose); and
- The misrepresentation was material to the spirit of the disability insurance contract at-issue and would have influenced coverage.
Intent and materiality are critical components, as they give policyholders a number of opportunities to circumvent the rescission of the policy.
Generally speaking, an honest mistake on an insurance application will not give an insurer the right to rescind the policy. For example, if you could not remember some injury you suffered as a child, and you forgot to include it in your application (in the medical history section), then — so long as you could show that the error was not intended — the insurance policy will continue to be enforced.
Materiality is a bit more complicated. Whether a misrepresentation is “material” depends on the totality of the circumstances. For example, if you lie about your marital status, and later submit a claim for an accident-related disabling condition (i.e., paralysis), then — arguably — your misrepresentation is not relevant. Unless the insurer can show that they would have changed the terms of your insurance contract, or would have denied you coverage altogether, then the misrepresentation will likely not be considered “material.”
Consult an Experienced Chicago Private Disability Attorney for More Comprehensive Assistance
Here at Bryant Legal Group, P.C., our team of Chicago-based disability attorneys have represented numerous policyholders in disputes with their disability insurers, helping them secure the benefits they are entitled to under contract.
We understand that disability policyholders are in a uniquely vulnerable position when submitting a claim for benefits, and that this can put a great deal of pressure on them — in the wake of a severe disability, a policyholder may be overwhelmed with a variety of problems, such as financial issues and quality-of-life concerns related to social integration. We believe that our client-oriented approach to legal advocacy ensures that our policyholder-clients always have a helping hand within reach. Here at Bryant Legal Group, P.C., we encourage open lines of communication so that we can respond to questions and concerns as they arise.
Call (312) 561-3010 to speak with an experienced Chicago private disability attorney for further guidance.