Drinking Could Cause Your Life Insurance Premiums to Rise

How much alcohol consumption is too much as far as life insurance goes? Heavy drinking reduces your life expectancy, so insurers are very concerned with how to discern between an applicant who has one glass of wine at dinner and an applicant who downs the entire bottle. The Center for Disease Control & Prevention (CDC) reports that long-term alcohol abuse can lead to dementia, stroke, cardiovascular issues, gastrointestinal diseases, and cirrhosis. In this post, we’ll discuss how drinking can impact your life insurance policy.

Alcohol Use & Premiums

On your life insurance application, your insurer will ask you about your alcohol use. Anything beyond social drinking will cause your life insurance premiums to rise. Having more than two drinks per day will disqualify you from preferred rates, and drinking in excess of three or four drinks per day will disqualify you from standard rates. After that, you’re going to have to take out a “rated” policy, which means you will pay an extra premium because of a risk factor—in this case, alcohol abuse.

How They Know

Even if you try to hide your alcohol abuse in your application, you will have to submit to blood tests when you apply for life insurance. One of the tests is a liver function test, also called a GGT, which measures irritation of the liver. The test will reveal elevated liver function if you’re a heavy drinker, but probably not if you’re only a moderate drinker. If you have an elevated level of liver enzymes, it doesn’t necessarily mean you have an alcohol problem. It could also mean that you have a health problem unrelated to alcohol, which is why the insurance company will usually then research the issue further with an “alcohol marker.” This is a test to determine if the liver problems are indeed caused by alcohol abuse. If the alcohol marker indicates the cause of the irritation to be alcohol, then your application will be declined.

Hard Proof: DUI’s and Medical Records

If your medical records document alcohol abuse, then your insurer will find out and charge you higher rates. Similarly, a recent DUI will also result in increased premiums, as drunk-driving charges are usually red flags for alcohol abuse. The older your DUI conviction is, the better your chances of obtaining normal rates. Typically, insurers will give you preferred rates if the conviction was at least five years ago. With multiple DUIs and other evidence of alcoholism or drug abuse, you will be basically uninsurable.

What about Recovering Alcoholics?

It takes a while for life insurers to forgive past alcohol abuse by reducing premiums. Even with successful treatment and months of sobriety, you will probably be declined or have the decision delayed until you have two years of recovery time. Once you hit the two-year mark, you are insurable, but you will pay higher premiums. After five years, you may qualify for standard premiums. Preferred premiums may take as long as 10-20 years of recovery time before you qualify.