Life Insurance and Alcohol Consumption: Background
Can I Get Life Insurance with Alcoholism? Life Insurance Alcohol Questionnaire
What About Life Insurance for Recovering Alcoholics?
Does Alcohol Consumption Affect Life Insurance Rates, and How?
What Life Insurance Types Can You Get with Alcoholism?
Does Life Insurance Cover Alcohol Deaths?
What is the Best Life Insurance for People with Alcohol Usage History?
More than three quarters of Canadians drink alcohol, making it one of the most used substances in the nation. Data from statista.com 2021) indicates that 16.6 per cent of Canadians are heavy alcohol drinkers (heavy use, as defined by the Canadian Institute for Health Information, is four or more drinks for women or five or more drinks for men drinks during a single occasion).
Excessive alcohol consumption is linked to a number of long-term health risks, including but not limited to:
In Canada, death from chronic liver disease has grown to 11 per 100,000 as of 2020.
In the eyes of insurance underwriters, heavy alcohol use is considered alcohol abuse or dependence. If you drink to excess, it can affect your application.
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Alcoholism is considered a health pre-condition, so the underwriter may deny or rate the policy, or you may qualify for a simplified or guaranteed issue policy. Each application is different, but the main factors considered are typically:
Life insurance for applicants with alcoholism depends on many factors; but generally, if you are currently excessively drinking, your life insurance application will likely be declined. If your excessive drinking was in the past, for example, you have abstained for 5-7 years, you will likely qualify for a standard rate. If you have abstained for 1-5 years, you likely will qualify for a rated policy, that is, a standard policy for coverage limits but with higher rates. However, if you have been in treatment and relapsed, or you have abstained for less than a year, your application will most likely be declined. | Expert tip from Mathieu Leblanc “Alcohol use, both current and past can have an impact on a client’s insurability. What’s important to understand is that it is not always reviewed on a stand alone basis. When assessing the overall risk profile other history such as DUI, hazardous sports or occupations, criminal history, drug use, and medical impairments are also taken into consideration in order to make a final decision. Most field underwriting guides will provide guidance on what current consumption, without a history of misuse/abuse, can be approved with standard rates assuming no other negative risk factors. If there is any history of alcohol addiction, abuse or misuse which required therapy in the past the most important thing to consider is whether or not the client has had any relapse in consumption since that time as even minimal amounts of consumption could lead to a decision to decline. When in doubt or when your client’s specific situation falls outside of what is described in field underwriting manuals, a properly structured preliminary inquiry can help you work with your chosen carriers to provide guidance on possible outcomes.” |
Alcoholism is considered a health pre-condition, so the underwriter may deny or rate the policy, or you may qualify for a simplified or guaranteed issue policy. Each application is different, but the main factors considered are typically:
Life insurance for applicants with alcoholism depends on many factors; but generally, if you are currently excessively drinking, your life insurance application will likely be declined.
If your excessive drinking was in the past, for example, you have abstained for 5-7 years, you will likely qualify for a standard rate. If you have abstained for 1-5 years, you likely will qualify for a rated policy, that is, a standard policy for coverage limits but with higher rates. However, if you have been in treatment and relapsed, or you have abstained for less than a year, your application will most likely be declined.
“Alcohol use, both current and past can have an impact on a client’s insurability. What’s important to understand is that it is not always reviewed on a stand alone basis. When assessing the overall risk profile other history such as DUI, hazardous sports or occupations, criminal history, drug use, and medical impairments are also taken into consideration in order to make a final decision.
Most field underwriting guides will provide guidance on what current consumption, without a history of misuse/abuse, can be approved with standard rates assuming no other negative risk factors. If there is any history of alcohol addiction, abuse or misuse which required therapy in the past the most important thing to consider is whether or not the client has had any relapse in consumption since that time as even minimal amounts of consumption could lead to a decision to decline.
When in doubt or when your client’s specific situation falls outside of what is described in field underwriting manuals, a properly structured preliminary inquiry can help you work with your chosen carriers to provide guidance on possible outcomes.”
Applying as a recovering alcoholic is not an automatic denial; it depends on the application, underwriter and several other factors. Before you apply:
Following is an overview of how Canadian underwriters typically treat life insurance and alcoholism.
| BEST CASE No current consumption | TYPICAL CASE Treatment/no relapses | WORST CASE Current consumption /relapses | |
| Insurer A | • 1-2 years: decline • 1 to 5 years: 100% to 300% increase • over 5 years: standard | Possible high rating | Decline |
| Insurer B | • less than 1 year: 400% increase • over 5 years: standard | Possible high rating | Decline |
| Insurer C | • over 5 years: standard | 150% to 200% increase | Decline |
Depending on your personal history of alcoholism, you may qualify for the following policies:
| Insurance Type | Medical Exam | Detailed Medical Questionnaire | Short Questionnaire | Coverage Limits | Important to Know |
| 1. Traditional, Medically Underwritten Life Insurance with PREFERRED RATES | Yes | Yes | No | $5,000,000+ | Is not available |
| 2. Traditional, Medically Underwritten Life Insurance with STANDARD RATES | Yes | Yes | No | $5,000,000+ | Only in best cases e.g., more than 5 years of no consumption |
| 3. Traditional, Medically Underwritten Life Insurance WITHOUT A MEDICAL EXAM | No | Yes | No | $5,000,000+ | Is not available |
| 4. Traditional, Medically Underwritten RATED Life Insurance | Yes | Yes | No | $5,000,000+ | Yes, the most likely scenario for people after 1 year of abstinence and with no relapses. Typical rating: 100%-400% |
| 5. Simplified Issue Life Insuarance | No | No | Yes | $500,000 | Most questionnaires will have an alcoholism-related question; you might be able to qualify but your rates will be quite high. |
| 6. Guaranteed Issue Life Insurance | No | No | No | $25,000 | Yes, you can always qualify for this one – does not mater what stage of breast cancer you have. It is important to know that this insurance does not pay in the first two years should the applicant pass away. |
To find the best plan and increase your chances of approval, work with a broker. Why? Because brokers can shop the market on your behalf and are not required to sell the products of only one company. The broker may email the insurance company to check on the chance of you being approved or declined before starting an application. Brokers provide you with the application that has your personal highest likelihood of success.
Does life insurance pay out for alcoholism? The answer to that question is: it depends.
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Many life insurance companies have an exclusion, so they do not have to cover deaths directly or indirectly related to alcoholism or overdoses. That means the policy will not pay out for any death where substance abuse is involved. That is cut and dried for things such as driving while intoxicated and dying in an accident. However, other situations are a big grey area. For example, was a heart attack due to prolong alcohol use? In those cases, the insurer will conduct an assessment and investigation before approving or denying the claim. | Expert tip from Amir Eny “Excessive consumption of alcohol can have an impact on someone’s ability to apply for a fully underwritten life insurance policy. More specifically, the applicant may be rated or even declined. The main factors an underwriter will take into consideration are:
The underwriter’s decision would be contingent on the applicant’s age, time since last use, and any co-morbid factors. A severe case might be declined. A more favourable case could be considered at standard with more than 5 years since last consumption. If an applicant does not qualify for a fully underwritten policy, they can still obtain coverage through a non-medical guaranteed issued policy, however, there may be a 2-year waiting period before they become in effect.” |
Many life insurance companies have an exclusion, so they do not have to cover deaths directly or indirectly related to alcoholism or overdoses. That means the policy will not pay out for any death where substance abuse is involved. That is cut and dried for things such as driving while intoxicated and dying in an accident. However, other situations are a big grey area. For example, was a heart attack due to prolong alcohol use? In those cases, the insurer will conduct an assessment and investigation before approving or denying the claim.
“Excessive consumption of alcohol can have an impact on someone’s ability to apply for a fully underwritten life insurance policy. More specifically, the applicant may be rated or even declined. The main factors an underwriter will take into consideration are:
The underwriter’s decision would be contingent on the applicant’s age, time since last use, and any co-morbid factors. A severe case might be declined. A more favourable case could be considered at standard with more than 5 years since last consumption. If an applicant does not qualify for a fully underwritten policy, they can still obtain coverage through a non-medical guaranteed issued policy, however, there may be a 2-year waiting period before they become in effect.”
Consider Manulife, SSQ Life Insurance, Empire Life, Canada Life, Assumption Life and other Canadian insurers as most have a rating system or simplified or guaranteed issue policies. Work with a broker so they can find and compare polices that match your situation. Our experienced life insurance brokers are happy to help. Simply complete the quote request on the right side of your screen to get started.
