We’ve already discussed DUI and DWI and the effect they have on life insurance. But what about the broader question of getting life insurance with a history of alcoholism?
You can get life insurance even if you have alcoholism in your past. But there are some conditions that complicate the process.
Why Alcoholism Matters to Life Insurance Companies
Even though alcoholism is a condition that is not generally fatal, it can lead to behaviors and outcomes that can cause early death.
Some of those behaviors and outcomes include:
- Death caused by driving while intoxicated
- A lifetime of excessive alcohol consumption that leads to a general degradation of health
- Accidental death as a result of being impaired
- Participation in hazardous activities and/or putting yourself in dangerous situations
- Greater likelihood of criminal activity and incarceration, both of which produce shorter life spans
When a life insurance company issues a policy on anyone, they need to have assurance that that person will live for many years. Anytime there are any conditions that indicate early mortality, the company will either increase the premium on the policy to compensate for the higher risk, or decline the policy outright.
How Does the Life Insurance Company Know About Your Alcoholism?
Like cigarette smoking and other unhealthy habits, people with a history of alcohol abuse often attempt to conceal their history (or even present use) from the insurance company. But the company has a variety of ways of determining that you have a history:
- You will be asked if you have a history of alcohol abuse on the life insurance application
- Blood tests are a routine part of the life insurance application process and can indicate alcohol markers confirming consumption of large amounts of alcohol
- An investigation of your medical records will reveal if you have ever sought treatment for alcoholism in the past
- A search of your driving records will indicate any history of DUI/DWI activity
The timing of any of these events will be critical. If you do have a history of alcohol abuse, the insurance underwriter will need to make a determination as to whether you are a recovering alcoholic, or a current alcoholic.
Recovering Alcoholic VS. Current Alcoholic
Which category you’re placed in will indicate whether or not you will receive approval for the application or be denied. Most life insurance companies will consider you to be an unacceptable risk if you are continuing to abuse alcohol, and refuse to approve your application.
The most important factor in applying for life insurance even as a recovering alcoholic is the timing. You’re going to need to show that you have been alcohol free for significant period of time in order to get a rating of standard or better. Generally speaking, any evidence of alcohol abuse within the past five years will see you rated as high risk resulting in higher premiums.
Five years may seem like a long amount of time, but the insurance company needs at least that much time because the rate of relapse among recovering alcoholics is high. The risk is generally thought to be considerably less if you’ve been alcohol-free for more than five years.
The good news is that once you get beyond the five year timeframe, your policy will generally be underwritten based on your overall health and less so on your history with alcohol. If you’ve been clean for at least five years, you’re ready to apply for life insurance.
What If You Haven’t Been Sober for at Least 5 Years?
This is where things get tricky. The easy answer is to simply wait until you have been sober for at least five years. But there are risks to waiting that long, particularly if you have no other life insurance coverage.
One risk is that your health could decline due to other factors while you are waiting for five years to pass. Another is that you will be older by the time it passes, and your premiums will be higher due to age. The biggest risk of all of course is that you can die waiting for five years to pass.
This puts you in a position of needing to do something to get life insurance even though you are within the five-year limit.
The Life Insurance Company You Apply To Will Make All the Difference
If you have a history of alcohol abuse it should go without saying that you’ll need to make sure that you are otherwise in excellent health. Overall condition always matters when you’re applying for life insurance.
Beyond maintaining your health, the single most important decision you will make is choosing a life insurance broker who can work with you. Any time you have any kind of health condition, the most critical decision you will make will be to work with a good insurance broker. That broker will be one who will work with dozens of different life insurance companies, rather than just one. The broker will know which insurance companies are more likely to approve a person with a history of alcoholism – and which companies to avoid.
That second part is very important, since a decline with one life insurance company could affect the underwriting decision of another.
An experienced insurance broker will send out prequalification letters to different insurance companies to determine if your application might be acceptable. In doing so, the broker is not actually submitting a formal application that could be denied. He will only proceed with a formal application if the company indicates in the prequalification that you may be an acceptable risk to the company. This will enable you to shop different companies without facing the risk of decline.
If you have a history of alcoholism, the selection of your insurance broker will make or break your life insurance application.
