Three Tips for Recovering Alcoholics Applying for Life Insurance
Talk to one of our experienced advisors, today!
7 minute read
Originally published: May 27, 2022
Updated: November 3, 2022
Three Tips for Recovering Alcoholics Applying for Life Insurance
Talk to one of our experienced advisors today!
7 Minute read
Originally published: May 27, 2022
Updated: November 3, 2022
Having a glass of wine or a beer at night, or drinking to socialize with friends and family likely won’t affect your life insurance application at all. But a history of alcoholism, or undiagnosed problematic drinking, will heavily affect your premiums because of the health dangers it presents. This blog about life insurance for alcoholics, we will be explaining the top three tips for recovering alcoholics who are applying for life insurance, how alcoholism affects life insurance, and how to get life insurance as a recovering alcoholic.
Occasionally, we get clients who are recently recovering from alcoholism and are looking for life insurance. They’re often worried that they won’t qualify for a policy because it’s only been a short time since they’ve been sober, and so they will ask “can I get life insurance if I’m a recovering alcoholic?”
The answer is yes! No matter what stage you are at in your recovery, there is an insurance product available for you.
In this article:
How alcoholism impacts life insurance
Excessive alcohol consumption can lead to several serious health problems and accidental injuries due to being impaired. Some illnesses linked to alcoholism include:
- Liver disease
- Long-term heart damage
- Stroke
- Cancer
- Diabetes
- Pancreatitis
- Neurological disorders
- Depression, anxiety, and other mental health disorders
As a result of these risks associated with excessive drinking, those who drink excessively are given higher ratings for life insurance than those who only drink occasionally and socially.
How much alcohol is considered heavy drinking?
If you’re not sure if how much you drink would be considered excessive or heavy, insurers will consider 3-4 drinks per day as heavy drinking. Generally, heavy drinking is classified as the following:
- Men consuming more than 3 drinks on any day or more than 13 drinks per week
- Women consuming more than 2 drinks on any day or more than 10 drinks per week
How do life insurance companies test for alcohol use?
During the underwriting process, you usually take a medical exam with routine blood and urine testing for substance abuse and share past medical records.
Blood tests will identify carbohydrate-deficient transferrin (CDT), which is a common sign of heavy alcohol consumption in the previous two weeks.
You’ll also be asked questions in an alcohol usage questionnaire about whether you drink or use any other substances and how often. These questions typically include:
- If you are not currently a drinker, when was the last time you consumed alcohol?
- Do you have any history of excessive drinking?
- Have you ever received alcohol-related counseling?
- Have you participated in inpatient or outpatient alcohol treatment?
- Have you been sober since your last treatment?
- Have you ever been charged with a DUI/DWI?
How can recovering alcoholics get life insurance?
If you are a recovering alcoholic, you may face some hurdles when buying a life insurance policy, like higher premiums and/or a longer application processing time for a thorough medical history review. Even if you don’t qualify for a traditional policy yet, you’re not completely out of options. There are many options available to you if you’re a recovering alcoholic looking for life insurance, for example:
- Group life insurance: Many employers offer group life insurance to employees that doesn’t require any health information for approval. However, this coverage may be limited and you’ll lose the policy if you change jobs.
- Funeral insurance: If you don’t qualify for traditional life insurance, funeral insurance policies offer enough coverage to pay for any funeral and final expenses.
- Guaranteed life insurance: Again, if you don’t qualify for traditional life insurance, guaranteed life insurance is a permanent life insurance product that will always accept your application.
You can also reapply in the future: insurers are more likely to consider you for their standard rates after you’ve been sober for 5 or more years. But this doesn’t mean you should wait to get any form of life insurance at all: it’s important to stay protected in the event of the unexpected. It’s best to get some form of coverage now and shop for a new policy or ask for a rate reconsideration after you reach 5 years of sobriety.
Buying life insurance as a recovering alcoholic can be more difficult than the process for someone with no drinking history, but it’s not impossible. It helps to know what challenges you might face. Working with an experienced life insurance advisor can help you find the right and affordable plan for your needs
How much does life insurance cost for recovering alcoholics?
Life insurance costs for recovering alcoholics can range from standard ratings to even 400% ratings. Depending on how long you’ve been sober, your rates and life insurance costs will differ. The longer you’ve gone without drinking and relapsing, the lower your rates.
In general you can expect to see the following rates for how long you’ve been sober for:
- One to four years sober: Substandard (highest) rates
- Five or more years: Standard rates
How Being an Alcoholic Impacts your Life Insurance Rates
Life insurance ratings are based on history of relapses and how long you’ve abstained from drinking. The longer you’ve gone without drinking, the lower your rates and less expensive your premiums. Because of the medical conditions and risks associated with excessive alcohol use, many providers decline coverage or significantly increase premiums for recovering alcoholics during their first 2 years of sobriety.
Although each life insurance company is different, you can be accepted for a traditional life insurance policy in less than 2 years, but you’ll probably get a high-risk rating, which means higher premiums. After five years, you have a better chance of getting a standard rating for a policy. While you recover from alcoholism, a no medical policy like a simplified or guaranteed issue policy can provide you with coverage until you qualify for the lower rate.
How Can I Reduce My Life Insurance Cost As an Alcoholic?
Aside from reducing how much you drink and going sober, seeking treatment or counseling can also help you get better rates. If you currently have an alcohol addiction, you should seek treatment in addition to buying life insurance. Programs like Alcoholics Anonymous can provide support that will be valuable for your recovery, and insurers will lower your rates if you are currently seeking treatment instead of leaving your alcoholism untreated.
Other Factors That Change the Cost of Life Insurance for Alcoholics
Along with your history with alcohol consumption, insurers will also look at your overall health and lifestyle choices, which can affect your premiums for life insurance as well.
Most insurers will have you fill out an alcohol usage questionnaire to gauge your alcohol usage. This questionnaire will typically ask about:
- Patterns of use (amount consumed and how often)
- Any change in drinking habits and reason for change
- Treatment required if any (Alcoholics Anonymous, medication, medical monitoring, etc.)
- History of relapse, if any
- Any history of drug use or mental illness
- Driving history
Frequently Asked Questions (FAQs) about Alcoholism and Life Insurance
Many insurers define heavy drinking as more than three drinks per day. They will also review your health for alcohol-related conditions and blood tests for indicators of heavy alcohol consumption.
You need to be sober for 2-3 years or more before you can qualify for most traditional life insurance policies. You’ll be eligible for the best rates after 5 years of sobriety.
Yes, recovering alcoholics can buy traditional life insurance after two to three years of sobriety and will pay much higher rates than people with no history of alcohol addiction. Or, if they are looking for instant life insurance, guaranteed issue life insurance will accept their application and provide coverage no matter what.
Yes! Your rates will be lower the longer you’ve gone without drinking, and if you’ve sought/are actively receiving treatment. If you’ve been sober for 5 years without any relapses, you’ll be given standard ratings – the same as a any other person without a history of drinking.
Most insurers will ask you to complete a questionnaire about your alcohol consumption to determine how much you drink. Typically, this form will ask questions about:
- Consistency and use patterns (amount consumed and how often)
- Changes in drinking behaviour and the reasons behind them
- If any treatment is necessary (Alcoholics Anonymous, medication, medical monitoring, etc.)
- Relapse history
- Any previous drug or mental illness history
- Driving background
If you’re an alcoholic in recovery and searching for life insurance with less than 5 years of sobriety, you still have a lot of possibilities, such as:
- Group life insurance: Many firms provide their workers with group life insurance that is approved without the need for any medical information. If you shift jobs, this coverage can be limited, and you’ll lose the insurance.
- Funeral insurance: Funeral insurance policies provide enough coverage to cover all funeral and final expenditures if you are not eligible for regular life insurance.
- Guaranteed life insurance: This is a permanent life insurance product that will always accept your application if you are not eligible for standard life insurance.
If you have been sober for over 2-3 years, some life insurance companies can give you a fully underwritten life insurance policy, but it will likely have a higher cost, but applying after 5+ years of sobriety will give you much more favourable rates.
Life insurance options are vast for recovered alcoholics who have passed 5 years of sobriety, they will basically be considered as someone with standard rates and will be able to purchase a fully underwritten life insurance policy such as a term life insurance and permanent life insurance policy.
Term life insurance: Term life insurance is a type of life insurance that pays out to your beneficiaries if you die within the term and is often the least expensive plan, with the largest coverage amounts available. The length of a term insurance policy in Canada might be 5, 10, 15, 20, 25 or 30 years. After the term has expired, you can renew your insurance, but the premiums will increase each time. For instance, if you buy a 10-year term life insurance policy and pass away within those ten years, your beneficiaries will receive a tax-free settlement (also called a death benefit).
Permanent life insurance: Whole life insurance, also referred to as permanent life insurance, provides coverage for the balance of your life. Additionally, it offers your beneficiaries a tax-free sum upon your passing. Certain plans could build up cash worth over time. Most permanent insurance policies include a promise that the rates won’t increase in the future. Additionally, you might only be able to pay once under some permanent insurance contracts. Participating life and universal life are two more options for permanent life insurance to take into account. Although it is a great option, permanent life insurance often costs more than term life insurance.
Finding The Right Life Insurance For Your Recovery
Buying life insurance as a recovering alcoholic can be difficult depending on your history and sobriety, but it’s not impossible. Working with an experienced life insurance advisor can help you find the right and affordable plan for your needs.
At Protect Your Wealth, we work with and compare quotes and policies from the best life insurance companies in Canada to help find the perfect solution for your needs. We’ve been providing expert life insurance solutions since 2007, including no medical life insurance, critical illness insurance, and permanent life insurance, to build the best package to give you the protection you need.
We’re proudly based out of Hamilton, and service clients anywhere in Ontario and British Columbia, including areas such as Burnaby, Maple Ridge, and Richmond Hill. Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today!
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