Ben Nguyen 
Introduction
For the millions of Canadians who struggle with alcoholism or alcohol use disorder (AUD), obtaining life insurance can be extremely difficult. Insurers view alcoholism as high-risk, given its association with long-term health issues, accidents, and increased mortality. However, recovery is possible.
This extensive guide examines how active alcoholism and a prior history of alcohol abuse affect life insurance eligibility in Canada. We provide expert insights on navigating the underwriting process of life insurance for individuals with alcoholism, steps to improve their chances, and the types of policies available.
Alcohol Use in Canada
According to Statistics Canada, 76.5% of Canadians aged 15+ reported drinking alcohol in 2019.
(Source: https://www.statcan.gc.ca/o1/en/plus/2877-dry-february-you-say )
Heavy drinking, defined as 5+ drinks per occasion for men and 4+ drinks for women, was reported by 18% of drinkers.
(Source: https://www150.statcan.gc.ca/n1/pub/82-625-x/2019001/article/00007-eng.htm)
Prolonged heavy alcohol use can lead to alcoholism, characterized by cravings, loss of control, and continued drinking despite negative consequences. In 2020, hospitalization rates for alcoholic hepatitis nearly doubled, increasing from 11.6 per 10,000 admissions pre-pandemic to 22.1 per 10,000 admissions.
How Alcoholism Affects Life Insurance Underwriting
Insurers consider alcoholism high-risk, given the associated health complications and higher mortality rates. During underwriting, key factors assessed include:
Amount and Frequency of Alcohol Consumption
- Daily alcohol intake volume
- Binge drinking episodes
- Long-term consumption patterns
Increased levels of drinking raise concerns about alcohol dependence and its impacts on health.
Formal Diagnosis of Alcohol Abuse or Dependence
- Clinical assessments by doctors
- Diagnostic criteria from DSM-5
- Prior interventions or hospitalizations
Formal diagnoses indicate a serious issue requiring treatment.
Duration of Sobriety
- For recovering alcoholics, length abstinent
- Relapse history
Sustained sobriety demonstrates lower risk. Frequent relapses raise concerns.
Treatments and Recovery Support
- Medications like naltrexone or disulfiram
- Rehab programs
- Counselling or psychotherapy
- Participation in Alcoholics Anonymous
Engaging in treatment shows commitment to overcoming alcoholism.
Alcohol-Related Health Issues
- Liver disease or cirrhosis
- Cardiovascular and heart problems
- Cancer risk
- Cognitive impairment
- Mental health disorders
Medical complications increase mortality risk.
Changes in Drinking Habits
- Increase or decrease in consumption
- Triggers impacting alcohol use
- Failed attempts to cut back
Shifting habits may reflect deeper issues.
Qualifying for Life Insurance for Individuals with Alcoholism
Individuals with alcoholism can take proactive steps to boost eligibility:
Seek Treatment and Support Recovery
Entering rehab, engaging in counselling, attending Alcoholics Anonymous meetings, and meeting with addiction medicine specialists demonstrate active recovery efforts.
Follow Medical Advice Closely
Complying with prescribed medications, getting recommended lab tests, and adhering to treatment guidelines shows commitment to health.
Maintain Ongoing Medical Monitoring
Regular checkups enable physicians to assess health status and catch emerging complications early.
Adopt Healthier Lifestyle Habits
Eating nutritious foods, exercising regularly, managing stress, and getting enough sleep promotes wellness.
Disclose Alcohol Use Openly and Honestly
Being transparent about consumption, diagnoses, relapses, and treatments enables fair risk evaluation.
Gather Records Demonstrating Progress
Submitting certificates for completed treatment, stable liver function blood tests, psychiatrists’ reports, and logs of AA meetings can demonstrate improved health status.
Taking accountability and demonstrating progress in recovery to the underwriter can significantly improve the odds of qualifying for coverage.
How Alcoholism Impacts Life Insurance Premiums in Canada
Active alcoholism or a history of alcohol abuse will often lead to higher premiums, known as substandard or “rated” policies. Actual premium increases depend on the severity and duration of sobriety:
| Insurer | Best Case | Typical Case | Worst Case |
|---|---|---|---|
| Sun Life | 1-2 years sober: Decline 3-5 years: +50-100% Over 5 years: Standard | +100-200% | Decline |
| Manulife | < 1 year sober: +200-300% Over 5 years: Standard | +100-150% | Decline |
| Canada Life | Over 5 years sober: Standard | +150-250% | Decline |
As years of sobriety increase, premiums incrementally approach standard rates. Recently relapsed or active alcoholics often face coverage declines.
An experienced life insurance broker can help review options from multiple insurers to secure suitable coverage given unique circumstances.
Types of Life Insurance for Individuals with Alcoholism
While obtaining coverage can be difficult, several life insurance solutions may be available for those struggling with alcohol abuse:
Traditional Life Policies After a Sobriety Waiting Period
Many traditional insurers like Sun Life, Manulife, and Canada Life will consider applicants who’ve maintained sobriety for 1-5 years without any relapses. However, substandard premiums, often 50-400% higher, will initially apply.
As the length of continuous sobriety increases, premiums incrementally decrease. After 5-7 years of abstinence, standard rates may be possible. It’s important to gather documentation like treatment records, blood tests, and physician statements to demonstrate recovery progress.
Simplified Issue Life Insurance with Alcoholism
With simplified underwriting, no medical exams, bodily fluid testing, or access to medical records are required. Applicants only need to answer a short health questionnaire.
Simplified issue policies typically offer up to $500,000 in coverage. While premiums are higher than fully underwritten policies, approval odds are greater for individuals with a history of alcohol abuse.
Major insurers like Industrial Alliance and Foresters offer simplified issue life insurance products in Canada.
Guaranteed Issue Life Insurance with Alcoholism
Guaranteed issue life insurance guarantees approval regardless of health conditions or alcohol use history. No medical questions or exams are required. However, coverage amounts max out at $25,000 or $50,000.
Policies are more affordable for those unable to qualify for other forms of insurance. Some guaranteed issue plans have a 2-year waiting period before full coverage takes effect.
Group Life Insurance with Alcoholism
Checking whether an employer, professional association, alumni group, or credit union offers group life insurance is wise. Group policies typically undergo limited underwriting, making approval more likely.
Coverage amounts under group plans often reach $500,000, with premiums paid via payroll deduction or association dues. Conversion to individual policies upon leaving the group is allowed.
High-Risk Specialty Insurers
Companies like Assumption Life, Canada Protection Plan, and RBC Insurance specifically cater to higher-risk individuals like those recovering from alcoholism.
While premiums are higher, these insurers understand the health implications of alcoholism and may provide customized solutions not available from mainstream life insurance companies.
With an experienced broker’s assistance, options can be thoroughly compared to find suitable life insurance coverage for each unique situation.
Pros and Cons of Life Insurance for Individuals with Alcoholism
There are several advantages and potential drawbacks to securing life insurance with alcoholism:
Pros of Life Insurance with Alcoholism
- Provides essential financial protection for loved ones
- Available despite alcohol abuse history with proper guidance
- Premiums can decrease over time as sobriety length grows
- Some options have guaranteed approval
- Could motivate individuals to maintain recovery and health
Cons of Life Insurance with Alcoholism
- Limited coverage amounts with some policy types
- Potentially high premium costs, especially early on
- Risk of denial if alcohol issues are not properly managed
- Need to remain transparent about alcohol use history
- Coverage exclusions possible for alcohol-related deaths
Carefully weighing the tradeoffs can help determine if life insurance is right given someone’s situation.
How to Buy Life Insurance for Individuals with Alcoholism
The process of purchasing life insurance for alcoholism involves the following:
- Reaching out to insurers to pre-screen eligibility
- Gathering medical records, treatment history, and physician statements
- Finding an experienced independent broker to assist
- Comparing quotes from multiple high-risk specialty insurers
- Selecting a policy with sufficient coverage amount and premiums you can afford
- Completing the application fully disclosing alcohol use truthfully
- Authorizing access to medical records and lab results
- Submitting any required supplementary questionnaires or exams
- Following up on status and providing additional details if needed
Having a knowledgeable advisor to guide you through underwriting intricacies is key to success.
Where to Buy Life Insurance for Individuals with Alcoholism in Canada
Several options exist for where to buy life insurance for alcoholism:
- Independent brokers – Recommended, as they can shop multiple markets and find you the best deal. Avoid captive agents representing only one insurer.
- Specialty insurers – Life insurance companies in Canada like Assumption Life, Canada Protection Plan, and RBC Insurance specifically cover higher-risk individuals.
- Online – Sites like PolicyMe and Maple Life allow you to compare quotes digitally. However, broker assistance is still useful.
- Group insurance – Check policies available through your employer, associations, or alumni organizations.
The right source depends on your preference for personalized advice vs. self-service and the complexity of your health history. Discuss your needs with an advisor to determine the ideal purchase avenue.
Overcoming Potential Denials for Life Insurance for Individuals with Alcoholism
Active alcoholism or recent relapses may result in denials by some insurers. Strategies to secure coverage include:
- Reapplying after demonstrating 6-12 months of sobriety
- Opting for guaranteed issue life insurance
- Enrolling in group life insurance available through an employer or association
- Considering a higher-risk specialty insurer
- Adjusting the requested coverage amount or policy type
Being flexible on benefit amounts or policy types may enable access to protection even if fully underwritten coverage is temporarily unavailable.
Pre-existing conditions often lead to higher life insurance premiums or difficulty getting approved. Conditions like Stroke , Diabetes, Kidney Disease, Cardiomyopathy , and Parkinson’s Disease,… are essential to disclose and discuss with your provider. Check out these articles:
- Life Insurance for Stroke Survivors
- Life Insurance with Kidney Disease
- Life Insurance with Cardiomyopathy
- Life Insurance with Parkinson’s Disease
- Life Insurance for Diabetics
- Life Insurance for Recovering Alcoholics
- Life Insurance for Neurodivergent Individuals
Why Full Disclosure is Critical When Applying Life Insurance for Individuals with Alcoholism
Failing to disclose alcohol abuse could constitute fraud and lead to several consequences:
- Denial of life insurance application
- Policy cancellation after issue
- Denied death benefit claim
- Legal action for misrepresentation
Always disclose alcohol use truthfully. Insurers can then evaluate risk accurately and offer suitable solutions.
The Claim Process of Life Insurance for Individuals with Alcoholism
When a life insurance policyholder passes away, beneficiaries must file a claim to receive a payout of the death benefit. The claim process typically involves:
- Contacting the insurance company to start a claim. Most insurers have dedicated claim phone numbers and personnel.
- Completing claim forms detailing the cause/circumstances of death and verifying the identities of beneficiaries. Medical records access will be required.
- Providing a certified copy of the death certificate from the province or territory.
- Supplying additional documentation as needed, such as medical examiner/coroner reports, police reports of an accident, and the policyholder’s medical history records.
- For individuals with alcoholism, insurers will investigate if alcohol contributed to death. Toxicology tests, blood alcohol contents, and autopsy conclusions help determine this.
- If alcohol caused or contributed to death, the claim may be denied depending on policy terms. Many policies contain exclusions for deaths related to alcohol or substance abuse.
- Once claim validity is confirmed, the insurance company will pay out the death benefit to designated beneficiaries per the policy’s terms.
- If the claim is denied, beneficiaries can appeal the decision and provide evidence to support overturning the denial. Legal assistance may be required.
Navigating the claims process can be complex for individuals with alcoholism. Having an experienced advisor assist with required documentation and coordinate with the insurer is highly recommended. They can help secure a smooth claims payout.
Consulting An Expert Advisor for Life Insurance for Individuals with Alcoholism
For Canadians struggling with alcoholism, obtaining life insurance may seem daunting, but viable options exist. By maintaining sobriety, engaging in treatment, monitoring health status, and disclosing history honestly throughout the underwriting process, individuals can improve their chances of qualifying for coverage. While premiums may be higher at first, they can decrease over time as recovery progresses. With proper guidance from an experienced life insurance advisor, solutions can be found to gain the financial protection needed for peace of mind.
At Life Buzz, our team of experts supports Canadians in navigating insurance complexities, even with pre-existing conditions like alcoholism. We’re here to help you secure coverage tailored to your unique circumstances.
To explore your options, contact us for a free consultation or request a quote.
FAQs about Life Insurance for Individuals with Alcoholism
What medical conditions caused by alcoholism are of concern to companies that have life insurance for individuals with alcoholism?
Liver disease, heart problems, cancer, stroke, neurological disorders, mental illness, and bleeding disorders are top concerns as they increase mortality risk.
Can you get life insurance for individuals with alcoholism after being diagnosed with alcohol dependence?
Yes, after following treatment plans and maintaining sobriety for 1-5 years, individuals diagnosed with alcohol dependence can qualify for coverage.
Does a DUI affect eligibility for life insurance for individuals with alcoholism?
Having a DUI raises concerns about alcohol abuse and risky behaviours. Multiple DUIs make approval very difficult.
Can an alcoholic get life insurance for individuals with alcoholism while waiting for a liver transplant in Canada?
It would be challenging as this indicates end-stage liver disease. Guaranteed issue policies have the only possibility of approval.
What is the best company in Canada for life insurance for individuals with alcoholism?
Assumption Life, Canada Protection Plan, and RBC Insurance specialize in higher-risk clients, including recovering alcoholics.
Can someone with alcohol-induced dementia get life insurance for individuals with alcoholism?
Yes, but likely only with a guaranteed issue policy that does not have medical underwriting. Coverage amounts are low, at $25,000 or less.
Can you get life insurance for individuals with alcoholism in Canada if you drink a bottle of wine daily?
It's unlikely, as most insurers would decline or rate that level of consumption. Treatment may eventually allow eligibility.
Can you get life insurance for individuals with alcoholism if you have alcoholic hepatitis in Canada?
Yes, but only a guaranteed issue policy that approves applicants without any underwriting. Coverage amounts are limited to $25,000.
Is abstinence required to get life insurance for individuals with alcoholism in Canada?
Most insurers require 1-5 years of total abstinence before considering an applicant with an alcoholism history.
How long after alcohol rehab can you get life insurance for individuals with alcoholism in Canada?
After six months to 1 year of successful rehab completion and maintaining sobriety, eligibility for coverage typically improves.
Can you get life insurance for individuals with alcoholism after an alcohol-induced stroke?
Yes, but you will be very high risk after a stroke. A guaranteed issue policy of up to $25,000 may be the only option.
Where can you find no medical exam life insurance for individuals with alcoholism?
Simplified issue and guaranteed issue policies available from some insurers do not require medical exams or records.
Should recovering alcoholics disclose their history when applying for life insurance for individuals with alcoholism?
Absolutely. Failing to disclose could constitute fraud and lead to a denied claim later. Honesty enables fair underwriting.
Article Sources:
Delve into the principles that guide our dedication to truthfulness, clarity, and editorial autonomy by exploring the Lifebuzz.ca Editorial Policy. This is the cornerstone of our esteemed status as the premier trusted source for life insurance information in Canada.
GIPHY App Key not set. Please check settings