Life Insurance and Cocaine Use or Other Recreational Drugs

Posted on January 3, 2011 and updated December 4, 2018 in Insurance Types, Life Insurance Canada News, Non-medical, Term Insurance 5 min read
life-insurance-policy
It’s tough to get life insurance
as a drug user, but here’s how

According to the most recent data from the Canadian Alcohol and Drug Use Monitoring Survey, cocaine and crack were the most prevalent drugs used by those 15 years or older in the past year after cannabis. Though only 1.2% of Canadians actually partake, compared to the 10.6% that use marijuana, an average of 11% of Canadians have used one of six illicit drugs in the past year, including cannabis, cocaine or crack, speed, ecstasy, hallucinogens (excluding salvia) or heroin. The rate of drug use among men (14.7%) is almost double that among women (7.6%) and is three times higher among youth (27.3%).

Illicit drug use has been on the decline in Canada since 2004, creating a lot of former users and addicts who may find themselves looking for life insurance one day.

As you can probably guess, life insurance companies do not treat cocaine use or other harsh recreational drug use very favourably. In almost all instances, current cocaine use, or other forms of recreational drugs, such as ecstasy or heroin will result in an automatic decline. It should be noted however that current drug users may be able to qualify for Simplified Issue policies. These policies have no medical tests and often do not have a drug related question.

You can get more details on simplified issue coverage by visiting our Non- Medical Life Insurance Quote Page.

We surveyed four insurance companies on how their underwriting guidelines view cocaine, heroin and ecstasy and here is what we found:

  • Current use results in an automatic decline.
  • Prior use over four years since the insured’s last use, with no other underlying health issues, will likely result in a policy rating. A policy rating means the insured qualifies, but pays an extra premium due to the increased risk to the insurer. Ratings are usually in a multiple and can be anywhere from 50% to 400% on top of the standard rate
  • Prior use over six years from the insured’s last use can qualify him or her for standard premiums, assuming they have no other underlying health and lifestyle issues.

In most instances, insurance companies send applications like these to their reinsurance partners. Reinsurance allows life insurance companies to transfer some of the risk on a life insurance application to a separate reinsurance company.


The reinsurer and the insurance company enter into an agreement which specifies how the reinsurer will pay for the insurance company’s losses if the need arises. The reinsurer is paid a reinsurance premium by the insurance company. Click here for more details on how reinsurance works.

We recommend speaking with an insurance advisor who has experience working with insurance companies on underwriting current or former drug users. 

For more details, you can contact us at 1-866-899-48491-866-899-4849 or visit our Term Life insurance Instant Quote Page.

avatar
Bob
Bob

Hi, Around 6 years ago I applied for disability insurance on a line of credit with TD, I was 30 at the time, and told them that I had used cocaine and ecstasy on a few occasions before I was 25. I was declined. I recently applied for similar insurance from TD again, without really thinking, and didn’t mention any drug use- it just feels like such a long time ago now- but was declined again. I enquired about life insurance recently, and I’m worried that I will be denied because they’ve obviously recorded what I’ve said 6 years ago-… Read more »

LSM Insurance
LSM Insurance

Hi Bob, Thanks there are several providers who offer Simplified Issue plans with a Cocaine or ecstasy related question.

LSM Insurance
LSM Insurance

Hi Pat, You still may qualify for a Simplified Issue policy – if you were just declined there would likely be a waiting period on non accidental deaths in the first two policy years,

Many Simplified issue plans do not have a drug use question.

LSM Insurance
LSM Insurance

If I was declined for life insurance baecause of cocaine do I need to get a graded policy

Toby
Toby

Hi can you insure someone who using Cocaine. This seems like a scam.

LSM Insurance
LSM Insurance

Hi Toby,

Keep in mind that the insurance does put certain safeguards in case. Most Simplified Issue plans which don’t have a Cocaine related question and pay out an immediate death benefit 1) Offers limited coverage usually a maximum of $50,000 2) Charge a higher than traditional life insurance policies 3) As a question if the insured is declined in the last 2 years 4) Other health questions are on the application that could be triggered by cocaine use such as Heart Attack.