Life insurance companies view drug and alcohol addiction during the underwriting process and will rate clients accordingly, if they are given an offer of coverage.
During the underwriting process, life insurance companies will evaluate an applicant’s health and lifestyle to determine insurability. Drug use and alcohol consumption are categorized as personal habits.
The company is concerned about an applicant’s habitual use of alcohol because of the impairment of judgment and reactions during intoxication; it is concerned about the use of drugs because of the effect on the applicant’s health and behavior, according to McGill’s Life Insurance.
In addition, prolonged alcohol consumption may also be harmful to a person’s health, especially if it is consumed at an above-average rate.
An insurance company is not concerned about the applicant who consumes alcohol in moderation and during special occasions, but concerned about the applicant who drinks to the point of intoxication.
Heavy drinkers are exposed to additional health conditions – such as liver damage, cardiovascular disease, depression, high blood pressure, dementia, nerve damage and pancreatitis.
These conditions not only effect their health but also their life and health insurance.
The National Institute on Alcohol Abuse and Alcoholism provides valuable information about proper alcohol consumption, effects it has on the body and what is considered a “standard” drink.
To be categorized as a moderate or “low-risk” drinker, men should consume no more than four drinks on any single day and no more than 14 drinks per week while women should consume no more than three drinks on any single day and no more than seven drinks per week.
People all over the world are often confused by the true amount of a “standard” drink. In the United States, one “standard” drink contains roughly 14 grams of pure alcohol.
To put this into perspective, this would mean:
- 12 ounces of regular beer, which is about five percent alcohol
- Five ounces of wine, which is about 12 percent alcohol
- 1.5 ounces of distilled spirits (i.e., hard liquor), which is about 40 percent alcohol
- Eight to nine ounces of malt liquor, which is about seven percent alcohol
Successful completion of a rehabilitation treatment program combined with several years of sobriety will render prior alcoholics insurable in the eyes of insurance companies.
However, drug addicts may not be as fortunate. If an applicant is currently using any drugs during the underwriting process, they cannot obtain insurance on any basis.
McGill notes that even after treatment, a former drug user may be considered uninsurable for as long as five years. They may also suffer from high premiums because of the possibility of resuming the habit.
Life insurance companies will view drug and alcohol addiction in underwriting on a case by case basis. Drug and alcohol addiction must be disclosed by law on an application for life insurance.
Want to learn more about life insurance? Read our article The Most Frequently Asked Life Insurance Questions.