Best life insurance for former drug users
Finding the right life insurance policy for your needs can be a challenge, and if you have a history of drug abuse, it may be even more of one. For most types of life insurance, carriers will review your medical records and will be made aware of your drug history. In addition, you will need to answer questions about your health and should be honest when asked about prior drug use since failing to do so could result in a claim being denied. Depending on the severity of your use, some companies may choose to turn down your application, or you may end up paying higher rates. Bankrate researched the options to help individuals make the best decisions when looking for life insurance for former drug addicts or users.
Can you qualify for life insurance if you’ve used drugs?
Yes. While qualifying for life insurance is typically more difficult if you are recovering from addiction, not all life insurance companies or policy types are the same. Each life insurance provider may have different conditions and sobriety timeframes, so shopping for coverage with several companies can help you find coverage. Insurance companies that accept policyholders with a drug or alcohol abuse background typically require two to three years of sobriety without a relapse.
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Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
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What is the best type of life insurance for drug users?
When applying for life insurance, submitting to a medical questionnaire and exam is standard for individuals using recreational drugs and those suffering from drug addiction. Those who partake in recreational drug use, such as marijuana, have many life insurance options and may even be eligible to skip a medical exam with some insurers. However, individuals with a history of drug abuse may have fewer options.
Below are some life insurance options that may be available to you. Traditionally underwritten policies are often the best options because you can purchase robust coverage at a reasonable cost. However, if you are not able to qualify for traditional life insurance, consider options such as burial, group, guaranteed issue or pre-need insurance. These types of permanent coverage have lower payout options but may be easier to qualify for if you are a former drug user.
Term life insurance
Term life insurance policies are usually the least expensive option since the policy contract is for a predetermined amount of time instead of the policyholder’s lifetime, and there is no cash value that accrues throughout the life of the policy. Typical policies provide coverage between 10 to 30 years. These policies may work well for people looking to provide financial support to their beneficiary during specific time frames, such as the length of a mortgage loan or while raising children.
Applying for term life insurance may or may not require a medical exam. A prescription history check will typically be required, however. For those with a history of drug use, full underwriting will often be mandatory, which also means the insurance company is likely to review your medical records.
Permanent life insurance
Permanent life insurance policies are designed to stay in effect for a policyholder’s whole life (with maximum coverage age ranging from 90 – 120) as long as premiums are paid. They are generally more expensive than term life since the death benefit is more likely to be paid, and the policies are inforce for a longer period. It may also have a cash value component that earns interest or dividends. You can access these funds via policy loans or withdrawals, depending on the policy type. Permanent life policies are often purchased to pay for funeral-related expenses, take care of any outstanding debt and provide financial support for the beneficiary. There is a broad range of policy types in the permanent category, including whole life, universal life, variable life and indexed universal life.
Applying for whole or universal life insurance will typically require a medical exam and a prescription history check. For those with a history of drug use, medical records are often reviewed during the underwriting process.
Burial insurance
Burial insurance is a type of permanent life insurance policy with lower death benefit limits and is intended only to cover funeral expenses. It typically has a low premium, but the average benefit selection is between $5,000 and $25,000. This type of life insurance does not typically require any medical underwriting.
Group life insurance
Group life insurance is often offered by employers and tends to be incredibly cheap — sometimes only a few dollars a month — or even free for employees. The coverage amount is often only equal to one or two times your salary, but it does not require any underwriting. It’s important to note that coverage is only active during your employment with the company. Depending on the plan your employer selected, you may have the option to purchase additional coverage, but it may require some medical underwriting.
Guaranteed issue life insurance
Guaranteed issue life insurance is permanent life insurance that doesn’t require medical underwriting for those eligible. However, it also has one of the most expensive premiums relative to the coverage amount. The death benefit is usually $25,000 or less. Since forgoing a medical exam poses a higher risk to insurers, there is usually a two-year waiting period before the full face value of the policy becomes available to beneficiaries.
Pre-need insurance
Pre-need insurance is a permanent type of policy where the life insurance company and funeral home work in tandem, or you could purchase the insurance directly from the funeral home. Similar to burial insurance, but this option comes with the benefit of you selecting your funeral arrangements ahead of time. In addition, the death benefit is paid directly to the funeral home upon your death rather than a beneficiary.
Common life insurance underwriting questions
Typically, insurance companies that accept policyholders with a background of drug or alcohol abuse require a minimum of two to three years of sobriety without a relapse. There is an increased mortality risk associated with former addicts, and to account for this, you may be placed in a high-risk group with more expensive premiums.
It can be tempting to withhold information to get a more affordable life insurance policy but don’t do this. A life insurance claim can be denied for drug use if it was not disclosed on the application. Underwriters can look into your medical records, public records and even social media accounts. If you are applying for life insurance that requires a medical exam, a blood and urine sample is often required. Being dishonest about addiction problems can cause your application to be denied and stop the policy from being issued. Here are some common questions you can expect when you apply for a life insurance policy:
- How long have you been sober?
- How long did you do drugs?
- What drugs were you addicted to?
- How did you administer them?
- Are you currently using drugs now?
- Have you ever relapsed? How many times? For how long?
- Have you sought treatment? Do you attend a support group?
- Are you employed? For how long?
- Has your addiction impacted your driving record?
- Do you have support from family or friends?
- Do you have any disabilities as a result of your addiction?
How drug use is defined by life insurance companies
Life insurance companies care about your drug use largely because of the health risks that may accompany it. According to the National Institutes of Health, drug use can go hand-in-hand with illnesses such as lung and heart disease, stroke, cancer and a range of mental health conditions. Having said that, not all drug use is equal, and someone who is an occasional user of marijuana, for example, will typically have much better success at finding life insurance than a person with a history of heroin addiction.
If you are currently using drugs in any manner that is not prescribed by a medical professional, you may need to seek help for your usage before you apply for life insurance. Insurers are typically more accepting if your drug use is in the past by several years at least.
Prescription medications
When applying for life insurance, some prescription medications may not influence your application, while others are considered higher risk by insurers. Notably:
- Addiction treatment drugs: Medications like suboxone, used for opioid addiction treatment, are often a concern for insurers. It could cause denial, impact premiums and raise questions about your health history.
- Painkillers and muscle relaxers: These are often temporary prescriptions. You may consider applying for life insurance after you’re no longer using them. Due to addiction risks and the potential for fatal outcomes, especially when combined with alcohol, insurers might increase premiums. Always be upfront about their usage.
- Prescription marijuana: The impact of prescribed marijuana on life insurance varies depending on the state and insurer’s policies. It’s important to disclose the reasons for its prescription.
- Other medications: Medications for mental health, diabetes and HIV might also affect premiums due to the health risks associated with these conditions.
For those wondering about specific scenarios like whether life insurance covers an overdose, the coverage can vary based on the policy terms and the insurer. In the case of an overdose, life insurance companies will typically take time to investigate the death prior to making a decision on the claim. Sometimes, a death caused by an overdose is ruled as death by suicide, and the life insurance policy will likely have a specific clause about suicide.
It’s crucial to discuss these details with a licensed insurance agent to understand how your medication history may affect coverage options and rates. Transparency with your insurer could be the key to the best outcomes.
Marijuana
If you use recreationally a few times a month, you may still qualify for the lowest rates from some marijuana-friendly life insurance providers. In some cases, you may be classified based on your frequency of use, so if it’s occasional, you can still get good rates. On the other hand, if you’re a daily marijuana user, you may be classified as a tobacco smoker, which will typically result in higher premiums. Since the status and legality of marijuana is in flux in many states in the U.S., life insurance companies differ in how they view it for potential policyholders.
Illicit drugs
Drugs like heroin and cocaine are illegal for many reasons, not the least of which is due to the increased health and safety risks associated with the abuse of narcotics. Even decades after treatment, previous heroin users have a shortened life expectancy, according to the National Institutes of Health. If you spent time in a rehab facility dealing with your addiction, you’ll need to disclose your past drug use, which may result in higher premiums. However, some insurers may still cover you if you’ve been clean for several years.
Alcohol
Life insurance companies will inquire about how frequently you drink, if you have ever needed treatment for alcohol abuse and if you have ever received a DUI/DWI. Alcohol abuse can cause severe physical and mental complications such as depression, high blood pressure, liver and pancreas damage and lower your immune system.
Tobacco
Smoking, vaping, chewing tobacco and cigars all negatively impact your health and can shorten life expectancy by 10 years. According to the Centers for Disease Control (CDC), it only takes five cigarettes a day to cause cardiovascular disease. Increased chances of a heart attack, stroke, and cancer of the lungs, throat, and mouth are other factors that cause high life insurance premiums for tobacco users. Many insurance companies will consider someone a non-smoker after 12 months of being tobacco-free, but they may still pay more than someone who has never been a smoker.
What to do if you are denied life insurance because of drug use
If you are currently using drugs, you will need to get clean and stay free of drugs for, typically, a few years or more before any insurer will cover you. But if you are managing your addiction and have been clean for years, keep in mind that every insurer weighs your information a little differently when assessing your risk. One insurer might require you to be drug-free for five years, while others could say two years.
If you are unable to find a traditionally underwritten policy, consider exploring no-medical-exam life insurance, including options we’ve listed above, such as guaranteed issue insurance. Also, don’t discount group coverage offered by your employer, and consider accepting as much of this insurance as you can afford.
Even if you didn’t get denied, it is wise to compare quotes from a few other life insurance providers to keep your insurance costs low since not all insurance companies will offer similar premiums. It may be difficult to determine which company will have the most favorable rates for your situation until you compare.
Frequently asked questions
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The best life insurance company for you will depend on a number of factors, including your coverage needs and your budget, as well as whether or not eligibility will be a factor. To find the best provider for you, it can be helpful to calculate your life insurance needs and then compare quotes from a handful of insurers able to provide the type of coverage you want. Or, you can start by researching insurers that will be more lenient towards your individual health conditions, including past addiction.
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Whether your life insurance covers overdoses depends on the situation. If you pass away within the policy’s contestability period, typically the first two years of policy activation, and you were not honest about your drug use, the insurance company may reduce or deny your beneficiary’s claim, depending on their investigation. If you pass away outside of the contestability period, your beneficiaries would likely receive the full death benefit. Typically, life insurance companies will pay your beneficiaries if you die from any accident, including an accidental drug overdose. If the drug overdose is determined to be death by suicide, then the payout would not occur if death occurs during the suicide contestability period. Speak with a licensed agent when shopping for providers to learn how the different insurers handle these situations.
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This refers to a period after your policy first goes into effect, during which your insurer is legally able to investigate and contest any claims made. The period usually lasts for a year or two after the start of the policy, but this depends on your carrier. So, for example, if the contestability period of your policy is two years, and you pass away a month after the policy’s inception, the company may wish to investigate to determine if there was any misrepresentation in your application. Once this period is over, the company cannot contest claims based on information provided in the application unless fraud is proven.
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