Your lifestyle can definitely impact your eligibility for life insurance. Vices such as tobacco or alcohol consumption may lead to higher life insurance rates or may even disqualify you from coverage entirely. So what options do alcoholics have when it comes to insurance protection?
In this guide, we’ll discuss life insurance for alcoholics. We’ll talk about why insurers deem alcoholics as high-risk, how varying stages of alcoholism may impact your coverage, and how you can get affordable life insurance as an alcoholic.
Why Do Life Insurance Companies Care About Alcohol Use?
Life insurance companies decide how much to price your premiums based on how likely you are to die during your coverage term. This likelihood to die is calculated in a process called underwriting – this is where they determine your risk profile. If the insurer deems you as a high-risk individual, you may be given higher rates or even denied protection altogether.
Alcoholism is tied to many serious illnesses including but not limited to liver disease, heart damage, stroke, and cancer. A history of alcohol abuse also tends to lead to mental health problems such as depression and anxiety. In some cases, binge drinking can even lead to death by alcohol poisoning. In addition to being a danger to themselves, alcoholics may be a danger to others because they’re more likely to engage in violent and reckless behavior such as abuse and drunk driving.
Therefore, alcohol abuse is a major cause of concern whenever life insurance companies determine your insurability. Once they detect this red flag, they’ll examine your life insurance application process and run your medical exam with more scrutiny.
Not disclosing your alcoholism to the insurer also puts your loved ones at risk. If you die from alcohol-related disease, your life insurance company will check your application to see if you disclosed your alcohol use. If they find out you didn’t, your life insurance policy will be voided and no death benefit will be paid out. Even if your history of alcohol abuse may raise your life insurance premiums or even deny you coverage altogether, it’s important that you’re honest about it in your insurance application.
Applying For Life Insurance As An Alcoholic
Insurance companies typically categorize alcoholics into three tiers, which will be discussed in this section.
You’ll have a very hard time qualifying for life insurance with a history of alcohol abuse, especially if you still have ongoing alcohol issues. Most traditional term and whole life insurance policies will deny protection to current alcoholics outright.
As discussed in the previous section, lying about your alcohol abuse will create even more problems in the future. Even if you don’t disclose your alcohol use in the application, insurance companies will investigate your death closely. Once they find any evidence of abuse they’ll immediately void your policy.
If you’re still suffering from alcoholism and need insurance coverage, one of your best options is to get sober before you apply for a policy.
Sober For Under Two Years
Generally, insurers will treat the recently sober – those who have been sober under two years – like they’re still using alcohol. This is because of the very high relapse rate of the recently sober. A study by Alcoholism Follow-up shows that less than 20% of their patients who stopped drinking remained sober for an entire year.
However, being sober this far means that you’re getting closer to two years of sobriety – the point where you’re once again eligible for traditional term or whole life insurance.
Sober For Over Two Years
Being sober for two years means that you’re now once again eligible for traditional term or whole life policies. However, your rates will likely still be high, and not all insurance companies will deem you eligible. Before you hit five years of sobriety, insurers will classify you using table ratings, which means that you’ll get higher rates.
Usually, five years of sobriety is required if you want more options for insurance protection. Once you hit this mark, the insurance company will use your health as the main determining factor of your risk profile.
Underwriting Considerations For Alcoholics
An alcoholic’s insurance application is looked at much more closely than that of non-drinkers due to their increased risk. These are several possible risk factors that an insurance company will examine when reviewing an alcoholic’s insurance application.
One of the main determining factors of your life insurance coverage as an alcoholic is your drinking habit. If you have a history of alcohol abuse and you’re still actively drinking, most traditional insurers will deny your coverage outright.
However, recovering alcoholics could qualify for traditional term or whole life coverage based on when their last drink was. Usually, current alcoholics can only qualify for guaranteed issue life insurance and accident coverage.
Participation In A Support Group Or Treatment
Participation in a support group such as Alcoholics Anonymous indicates a desire to stay sober. By showing that you regularly attend AA meetings or take part in a similar support group, you’re showing the insurers that you’re serious about staying sober.
Another option is to check into a rehabilitation facility. However, this usually only applies if you go into rehab of your own volition rather than a court order. By showing documentation that you’re in a support group or have gone into rehab, you’ll be viewed favorably by the underwriter.
Because a history of alcoholism is closely tied to health issues, the insurer will also take a close look at your medical records. The insurer will be more alert for diseases related to excessive alcohol use such as liver disease, stroke, and cancer. Insurers will also run a medical exam to see how much alcohol you consume by testing your urine or liver enzymes.
History Of Drunk Driving
In addition to yourself, excessive drinking may be dangerous to others as well. This is why your insurer may check if you have any drunk driving incidents on your record. If you have more than one DUI conviction within the last year, you can be sure that your insurance coverage will be denied. However, you may still get coverage with higher rates if you only have one DUI in the past year.
Insurers will also check to see whether your alcohol addiction is affecting your career. They’ll examine your employment history and whether your drinking problem has caused you to lose your job or not. By having consistent and responsible employment, you’ll look more favorable in the underwriter’s eyes.
Alternative Insurance Policies For Alcoholics
If you have a history of alcohol abuse and are still actively drinking, you’ll be denied coverage for most traditional term or whole life insurance. Here are two insurance alternatives that you can choose if you’re still working on getting sober.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance, as the name implies, does not have qualification requirements. This is a form of whole life insurance that will always be issued, and you can’t be turned down regardless of your health. Because it features no medical exam and you’re guaranteed to be protected as long as you pay your premiums, this can be an alternative to alcoholics who do not otherwise qualify for other types of life insurance.
However, these policies are usually only available to people over 40 years old. It also requires you to pay more expensive premiums with a lower insurance face amount. A guaranteed issue policy also has a two-year contestability period like other insurance policies.
Accidental Death & Dismemberment Insurance
If you’re too young for a guaranteed issue life insurance policy, you can opt for accidental death and dismemberment (AD&D) insurance. Technically speaking, AD&D insurance isn’t life insurance because it only provides a death benefit if you die in an accident covered by your policy. Another benefit that an AD&D policy provides is that they pay out part of the insurance face amount if you lose a limb, suffer paralysis, or lose the use of specific body parts.
Which accidents are covered will vary according to your policy, but common accidents include falls, fires, drowning, and transport accidents. You should note that alcohol-related deaths aren’t covered in an AD&D policy.
Because of its limited scope, an AD&D policy should be treated as supplemental life insurance. You can buy an AD&D policy to protect yourself in the case of accidents, but you’ll still need a full life insurance policy once you can qualify for it.
How To Get Better Insurance Rates As A Recovering Alcoholic
If you previously abused alcohol and are now several years sober, you’re likely to be able to qualify for some life insurance. However, your age and alcoholic history may result in higher rates. To help you keep your rates affordable, here are several tips to find lower life insurance quotes as a recovering alcoholic.
Work With An Independent Life Insurance Agent
A good independent life insurance agent can help you find the best life insurance deals. With their experience, they’ll be able to find the best life insurance companies for a recovering alcoholic. Agents can also apply policy discounts that you may not otherwise know about.
Improve Your Personal Health
Health is one of the most important determinants of your insurance rates. Because you formerly suffered from alcohol dependence, you’re more likely to have health issues – this part may be an uphill climb. However, improving your health won’t just impact your insurance rates, it’ll also bring benefits to your daily life.
Because insurers will look at your life insurance application closer as a former heavy drinker, you should keep all your supporting documents easily accessible. This includes your doctors’ contact information, a list of all the medications you’re using, as well as copies of your medical records.
Attend Counseling And Support Groups
By participating in support groups and counseling, you’re showing a commitment to stay sober. Not only will this help your chances to get a better insurance rate, but you’ll also help yourself stay sober. As with your health records, it could be wise to keep documentation and proof of participation in your support groups.
Have A Clean Driving Record
Having a DUI on your record will almost guarantee that you’ll be charged higher in your life insurance quotes. If you have too many DUI convictions, you’ll be denied coverage altogether.
Unfortunately, the only thing you can do to fix a DUI is time and clean driving. If you have a DUI, it may take ten years without any driving offenses before an insurer considers you for lower rates.
Getting life insurance with a history of alcohol misuse can be much tougher. You’ll likely be charged increased rates and a stand chance of outright coverage denial.
However, it’s not impossible, especially if you’re on the way to sobriety. To reduce your insurance premiums, you can start by improving your health and proving your commitment to stay sober by attending support groups. You can also explore other options to protect your loved ones, such as guaranteed issue life insurance or an AD&D policy.
If you’re looking for life insurance coverage as an alcoholic, Wesley Insurance, LLC is here to help! Our team of professionals can advise you on how to lower your risk profile and get better insurance rates. Contact us today for more information!