Life Insurance for Recovered Alcoholics

I’ll open with the brutal truth. If you are a current alcoholic, you will not be able to get a traditional life insurance policy and must opt for a guaranteed issue or an accidental death & dismemberment plan.

If you are a recovered alcoholic with over 5 years of sobriety, you can get a standard rating with companies such as Mutual of Omaha or Prudential. In this article I will cover how to find the best rates and give you a few tips if you are looking for life insurance with a history of alcohol abuse. I will not lecture you with the details of how alcohol impacts your health and why it’s bad for you. Let’s get to it.

Related: Life insurance with pre-existing conditions.

How Does a Carrier Know About My Alcohol Habits?

You should always see the insurance companies like you do Sherlock Holmes – the best detective ever.  Nothing is ever gets hidden from them, and for a good reason. They must pay claims which could amount to billions of dollars, so they better know what they are doing or they will go out of business.

They have so many tools in their arsenal, such as the Medical Information Bureau (MIB) that will disclose past insurance policy declines for any health conditions or the Motor of Vehicle Records (MVR) that will reveal DUI or DWI convictions.

They also have access to your medical records, which will give them enough information to decide whether or not you are an alcoholic. But the most significant one they will have is your blood test results (since most companies require you to go through an exam). Even if you do not report alcohol consumption on your application, one part of the blood test will look at your liver functioning, and the results will reveal the facts.

If your blood and urine tests show irregularities or an elevated liver function, the insurance company will more than likely assume heavy drinking.  They will start asking more questions, request more information, and will eventually get to the bottom line about your current alcohol habits and use.

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How Long Do I Need to Wait Before Applying?

With most insurance companies, it’s safe to apply after you have been sober for at least 5 years. American National will consider you after 2 years of sobriety as long as you have had alcohol treatment, but this would come at a heavy cost between standard to table 8 rating (about 500% more than a preferred table). Keep in mind that under 2 years you will face a postponement from the insurance company, which means coming back at a later date to apply again.

Five years may seem like an eternity to wait for some, but the reason they wait that long is the relapse issue. According to the National Institute on Alcohol Abuse and Alcoholism, evidence shows that roughly 90% of people with alcoholism relapse within 4 years after completing treatment. If you have been sober for over 10 years and have no other health issues, you can get a preferred rating with most companies.

The Underwriting Process

So, you have decided to apply for coverage. Be sure to disclose all alcohol-related information on your application form. Also make sure that you provide a complete description and cover letter about your past issues with alcohol, which includes anything you have done to treat the situation and whether or not the treatment has been successful.

Make sure to describe how your life is nowadays: are you going to school? have a good job? have children? The insurance companies want to see as many reasons to support the fact that you would continue your current sober life and not make them pay if you relapse and die.

If your application requires an exam, be sure to read this article about life insurance underwriting testing. You can also count on the insurance company to request an APS (attending physician statement). Make sure you have the doctor’s name and address and list any medications prescribed. You may need to bug your doctors to get this to the insurance underwriter promptly.

What the Underwriter Will Ask

• Does your medical record show any current or past alcohol problems?
• Have you had a DUI/DWI?
• Do you have any other health issues?
• Have you ever attended or do you currently participate in AA?
• What are your current liver enzyme levels?
• Have you attended rehab or therapy? If so, when did it happen and was it successful?
• How much do you drink daily?
• Are you a tobacco or drug user?
• Have you had any medical complications due to alcohol abuse?

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Best Tips for Getting Life Insurance for Recovered Alcoholics

• It would be best to wait at least 5 years before applying for coverage.
• Stay healthy and don’t smoke. Easier said than done, but if you are a smoker, you will face higher rates, not to mention other health challenges. Smokers pay 2-3 times more than non-smokers.
• Find an insurance broker who can help you find the most favorable insurance company. As discussed before, not all companies are using the same underwriting criteria when it comes to alcohol abuse.
• It goes without saying, be honest about your alcohol consumption. The insurance company has a two-year contestability period where they can investigate the cause of death and not pay claims if you lied on the application.

Case Studies: Tailored Life Insurance Solutions for Recovered Alcoholics

Case Study 1: Traditional Term Life Insurance

Mark is a 40-year-old man who has been sober for over 10 years after battling alcohol addiction. He is now married with two children and wants to ensure their financial security in case of his unexpected passing. Mark decides to explore traditional term life insurance options.

Mark contacts an insurance broker who specializes in assisting individuals with a history of alcoholism. The broker helps him gather all the necessary information about his sobriety, including medical records, treatment history, and lifestyle changes. The broker also connects Mark with insurance companies that have experience underwriting policies for recovered alcoholics.

Mark chooses a 30-year term life insurance policy with a death benefit of $1 million to provide substantial coverage for his family. After a thorough underwriting process, which includes medical evaluations and a review of his sobriety history, Mark is approved for the policy. He pays a monthly premium of $150 to secure his family’s financial future.

Case Study 2: Guaranteed Issue Life Insurance

Lisa is a 55-year-old woman who has recently completed a rehabilitation program for alcohol addiction. She is working on maintaining her sobriety but is concerned about her ability to secure life insurance due to her past struggles.

Lisa learns about guaranteed issue life insurance, a type of coverage that is available without a medical exam or health questions. She contacts an insurance agent who specializes in high-risk cases and assists individuals with pre-existing conditions.

Lisa applies for a guaranteed issue life insurance policy with a death benefit of $50,000. Since this type of policy does not require medical underwriting, Lisa is approved regardless of her past alcohol addiction. She pays a monthly premium of $200 to have some financial protection for her loved ones.

Case Study 3: Permanent Whole Life Insurance

Michael is a 50-year-old man who has been sober for 15 years after a long battle with alcoholism. He has rebuilt his life, started a successful business, and wants to leave a lasting legacy for his family. Michael decides to explore permanent whole life insurance options.

Michael works with a financial advisor who specializes in estate planning and life insurance. Together, they review different whole life insurance policies and discuss the benefits of the cash value accumulation feature.

Michael chooses a whole life insurance policy with a death benefit of $500,000. He pays a monthly premium of $300, knowing that a portion of it goes towards building cash value over time. This cash value can serve as an additional asset and provide him with financial flexibility during his lifetime.

Last Word

If you are looking for life insurance with a history of alcohol abuse, don’t just blindly apply with a random insurance company, or try to apply by yourself.  Even worse, don’t apply with an insurance broker who works in a call center. They mostly sell to healthy folks, and every time they are faced with a potential decline, they will sell you a guaranteed issue policy (which will cost you more and the death benefit will pay less).

Work with a broker who can review your case and get back to you with a few offers suited to your individual situation. Anyone who just shoots rates over the phone without asking questions is someone you should avoid.

If you are in perfect health and do not want to talk to a broker, I can understand that; you will get the best rates even if you choose to do this by yourself. But if you have a particular circumstance, such as a history of alcohol abuse, the odds will be better in your favor with someone helping in your corner.  You can go ahead and run the quotes here on this page.

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