You don’t need to follow the news every day to know that in recent years, the world has experienced a significant loss in talent as a direct result of drug use. Superstars such as Whitney Houston, Michael Jackson and even Prince are just a few of the recent causalities who have passed away recently as a direct result of drug addiction.
And while it’s easy to say…
That these deaths are simply a result of living a life of excess, the truth is, drug addiction no longer an issue that is reserved for any “one” particular “class” of people. In fact, according to the American Addiction Centers, as of 2014, it is estimated that nearly 7 million American’s are currently struggling with a drug disorder.
This is why…
We’ve chosen to write this article so that those who have suffered or are currently suffering from a drug addiction might have a better understanding of what it will be like to apply for a life insurance policy with such a “pre-existing” condition.
Additionally, we’re well aware that there are many individuals out there who are also concerned about a loved one who is struggling with addiction which is why we’ll also provide some information about what they can do to help their loved one secure a life insurance policy for themselves.
Now for the purposes of this article…
We’re not going to include marijuana or alcohol use in our discussion, primarily because these two substances will be treated differently by the life insurance industry.
Will life insurance companies be interested in your marijuana use? Certainly, but marijuana is not going to be “treated” by the insurance company the same way cocaine or ecstasy will be. Additionally, insurance companies aren’t necessarily going to be worried about those who drink alcohol on a regular basis. However, if a individuals alcohol consumption crosses the line into addiction, it too will become an issue on ones’ life insurance application, however it will still not be “considered” the same as drug addiction will be.
With that said…
Let’s begin our discussion on life insurance and drug abuse by answering some common questions that we receive on a daily basis from individuals who have a history of drug abuse and are looking to qualify for a traditional term or whole life insurance policy.
What are my chances if I am a Past drug user?
Insurance companies are not necessarily going to be all that worried about an individual who has “experimented” with drugs in the past. That being said however, most if not all fully underwritten term or whole life insurance policies are going to ask if you have used any narcotics within the past 12 months.
If you have, you’ll likely have your life insurance application either be denied or postpone until which you are 1 year removed from the last time you used.
Now this 1 year from the last time you used will not apply for those who have had a “steady” history of usage or addiction, for these individuals you will generally need to have been “clean” for at least 3 years.
To determine what “type” of past drug user you are, the life Insurance companies are likely to ask you questions like
- What kinds of drugs did you use?
- How long did you use these drugs?
- Did you have a prescription for these drugs?
- Were these drugs used to treat some other kind of pre-existing medical condition?
- When did you quit taking these drugs?
- How did you quit taking these drugs? Rehab, abstinence, prescription therapy.
- Have you suffered from any relapse?
- Did you ever suffer from an overdose?
- Have you ever been hospitalized due to your drug use?
- Are you currently using any other drugs or prescription medications?
These answers to these questions will help an insurance company to determine what “type” of risk you may pose as an insured and will be key in determining whether or not you will be eligible for a traditional term or whole life insurance policy.
What Happens If the “Applicant” is Still Using Drugs?
Securing a standard life insurance policy while still actively using drugs is going to automatically disqualify an individual from being able to qualify for a traditional term or whole life insurance policy. You will simply be considered “TOO RISKY” to insure.
These individuals however may still be eligible for what are called guaranteed issue life insurance policies, which are life insurance policies that will not require an applicant to take a medical exam or answer any health-related questions.
Unfortunately, these policies only provide up to around $25,000 dollars in coverage and are only available for those over the age of 40 (in most states). Additionally, these policies will also contain a graded death benefit which will limit when the policy will begin covering the insured for natural causes of death. For more information regarding guaranteed issue life insurance policies, we would recommend that you give us a call.
What if I lie about my prior/current drug use?
First, it’s never a good idea to lie on your life insurance application because not only will you probably get caught, once you do get caught, this will certainly make it more difficult to qualify for life insurance later on (See below: Medical Information Bureau).
Second, let’s suppose you don’t get caught but then the insurance company learns about your drug use later on. In cases like these, your intentional “material misrepresentation” of your health can be a potentially cause the insurance company to deny or cancel your life insurance policy! Or in other words, your loved ones would receive nothing!
How would a life insurance company know if I lied?
Life insurance companies are going to use 6 techniques to learn about your drug use.
- The life insurance application.
Within your life insurance application, you will be asked: “Have you used any drugs or narcotics within the past 12 months?” and “Do you have any history of drug or alcohol abuse ever?” Now you can choose to lie and not disclose any prior usage, however as we discussed before, this can and often will lead to several negative consequences.
- The medical exam.
During your medical exam, you will be required to submit to a blood and urine sample which will be used to test for the presence of any drugs or alcohol. If found, these results can be used to disqualify you from being able to qualify for a traditional term or whole life insurance policy.
- Your doctor’s records.
Many times, your medical records may be requested for review by an insurance underwriter. Which means that if at any time, you tested positive for drugs or have had discussions about your drug use with a doctor, these may be used in determining the outcome of your life insurance application.
- A prescription database record.
Insurance companies will also order a copy of your complete prescription medication history. Now you’re not likely to find any “illicit” drugs on this report, however if you’ve been abusing any prescription medications in the past, evidence of this may be found by analyzing your prescription medication history.
- A DMV report.
DMV reports may also provide insurance underwriters with an idea if there may be a substance or alcohol abuse problem. For example, if you have 5 DUI’s on your record in the past 2 years, an insurance underwriter will probably want to learn a little bit more about what’s going on in your life prior to approving your life insurance application.
- A criminal background check.
Here again, having a prior misdemeanor or felony on your record my not reveal much about the presence of a past drug history, but if you’ve been arrested for possession of a narcotic, this will probably be something the insurance underwriters will want to learn more about.
- The medical information bureau report (MIB).
The medical information bureau report or MIB report, is an internal report used by life insurance companies to track the outcome of life insurance applications from one company to the next. So, if you have applied for life insurance in the past and were turned down due to drug use, other insurance companies will have access to this information and be able to use this information in determining if they want to approve you for coverage.
So as you can see, insurance companies are going to first ask you if you have a history of drug use/abuse, but they’re also going to use a serious of utilize a series of other tools at their disposal in order to “flush” out any hints of prior usage.
What happens next when a life insurance company refuses to underwrite my policy due to my drug history?
It’s certainly going to be more difficult for an individual who has a history of drug abuse to qualify for a traditional term or whole life insurance policy. Common causes that will lead one to be denied coverage may include:
- Not enough time has elapsed since they used last. Insurance companies will want to see a minimum 3 years before the will approve coverage for a traditional term or whole life insurance policy.
- Too many “relapses” in the past.
- Other pre-existing medical conditions linked to their previous drug use could prevent one from being able to qualify for coverage.
- Previous felonies related to their drug us may also prevent one from being eligible for coverage.
- Etc, etc…
In cases where a traditional term or whole life insurance policy isn’t possible, applicants may want to consider an “alternative” insurance product like a guaranteed issue life insurance policy.
Guaranteed issue life insurance policies are insurance policies that won’t require an applicant to take a medical exam or answer any health-related medical questions.
Unfortunately, these policies are generally limited to around $25,000 dollars in coverage but are often times a perfect alternative for those who simply cannot qualify for a traditional life insurance policy.
How can I get the “best” life insurance policy if I have a history of drug abuse?
Here at JustBuryMe, what we’ve found to be the most helpful technique in helping our clients find the best life insurance policy that they can qualify for is to exhaust as many available options as possible!
You see, not all life insurance companies are going to follow the same rules and guidelines when it comes time to determine who the will and won’t insure. This is why we’ve worked so hard at establishing quality relationships with dozens of different life insurance companies so that when it comes time to helping our more “challenging” life insurance applicants, we don’t have to simply rely on one or two different options!
So, what are you waiting for? Give us a call today and see what we can do for you!