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Life Insurance and Cocaine, Can I Get Covered?

Written by Shelter Bay

We often get questions from our clients about how cocaine use affects their life insurance.

If you’re wondering what happens after a failed life insurance drug test, if life insurance covers drug overdose, or how a past history of drug use can affect your insurance, you won’t want to miss what we’ve got to share with you in today’s post.

We’ll look at how life insurance companies view cocaine, then we will see what your chances are of getting coverage—based on current or past use—and how to apply for coverage.

Life insurance and cocaine: How do insurers look at it?

There are many aspects to consider in relation to health and cocaine usage—recreational use/addiction, length of use, adverse health effects, and overdoses.

To start, we’re going to focus on the potential life expectancy of a cocaine user.

Life insurance companies base coverage on their level of risk to insure you—they use risk assessment criteria to calculate premium rates based on the probability of whether or not you will file a claim. The underwriters then balance the insurer’s profitability with your potential need to use the life insurance policy.

The underwriter’s goal is to protect the insurance companies and policyholders. If the criteria tend to result in more life insurance payouts, the price for coverage increases. For example, smokers are more likely to need hospitalization than non-smokers.

Due to the negative health implications of being a cocaine user, you can see how this would have an effect on life insurance premiums.

If you’d like to learn more about the life insurance underwriting process, click here.

Does life insurance cover drug overdose?

Cocaine causes health complications and excess usage can result in death due to an overdose. According to Health Officers Council of British Columbia, 47,000 Canadian deaths are linked annually to substance abuse, including cocaine.

A past drug overdose is a major red flag on a life insurance application. Depending on how long ago the overdose took place, coverage could be denied altogether.

If you have an existing life insurance policy, does life insurance cover drug overdose? In many cases, the answer is no. This is because life insurance policies often include specific exclusions for risky behaviours, including anything from skydiving to drug use. However, the answer can depend on things like what kind of drug was used and whether the overdose was accidental or intentional.

Be sure to speak with your insurance provider to find out how your particular plan works with drug overdoses.

Another important issue is that people who are addicted to cocaine will often do anything or go to any lengths to get it—which can lead to dangerous situations.

This is why insurance companies are reluctant to insure cocaine users—because of their potentially shortened life expectancy and higher health risks.

Can I get coverage if I used cocaine in the past?

Depending on a few factors, there are still ways a past cocaine user can qualify for life insurance.

The following is how most insurance companies view cocaine use for traditional life insurance coverage:

  • Automatic decline if used between 3-4 years prior to application.
  • Possible rated offer if cocaine was used previous to 3-4 years, with rates up to 300 percent above the rated premium.
  • Standard rate if you have not used cocaine for six years or more.

If you currently use cocaine, traditional life insurance is probably not an option for you. If it was, it would be extremely expensive.

Simplified issue life insurance.

The good news is, you can get coverage. How? You can apply for a simplified issue life insurance product. There are no medical tests, and some insurance companies don’t ask any drug-related questions for this type of life insurance.

To find out more about whether no medical life insurance is right for you, visit this link.

It’s important to note that you should speak with an experienced life insurance broker before applying for any type of life insurance.

For example, let’s say you apply for traditional insurance and get denied. Although simplified insurance questions don’t ask drug-related questions, they may ask if you were ever denied coverage. You have to answer truthfully to avoid insurance fraud charges.

Simplified issue insurance exists for those who do not typically qualify for traditional life insurance.

You might also be curious about simplified issue critical illness insurance. You can find out more about it here.

While the policy is more expensive and the benefit less than traditional coverage, the pros far outweigh the cons of not having any life insurance at all. Most drug users think they will never qualify for life insurance, but that is because they are unaware of all the options.

Speak with an insurance professional today so you can have the peace of mind that life insurance brings.

At Shelter Bay Financial Corp., we know that understanding life insurance products can be complicated.We are experts on all the different types of life insurance available in Canada.

For more information about life insurance options for cocaine users and simplified life insurance, please call us directly at 1.888.498.5288

If you learned a lot from this post and you’re interested in exploring similar topics, please visit these posts:

I Have a Criminal Record! Can I Still Get Life Insurance?

Life Insurance for HIV-Positive in Canada

Three Signs You are a High Life Insurance Risk

This article was originally published on May 13, 2017, and has been updated.

Shelter Bay Financial Corp
Shelter Bay Financial Corp

Life & Health Insurance brokers working for Canadians

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