Jeff is a well-known speaker and expert in life insurance and financial planning. He has been featured and quoted in Nerdwallet, Bloomberg, Forbes, U.S. News & Money, USA Today, and other leading finance websites. He is a licensed life insurance agent and has helped over 3000 people secure life insurance. He is licensed in all 50 states & DC. Jeff has spoken at top insurance conferen...

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Written by Jeff Root
Licensed Life Insurance Agent Jeff Root

Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent Benji Carr

UPDATED: Jun 28, 2022

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Today’s topic in life insurance is going to focus on the effects of drug use on your life insurance premium.

Drug use is a difficult one for underwriters, as it has many definitions and the severity can range from an occasional aspirin for a headache to abuse of prescription pills to severe and dangerous addiction to legal substances.

According to the National Institute on Drug Abuse (NIDA), an estimated 22.7 million Americans needed treatment for drug-related problems, including tobacco, alcohol, prescription, and illicit drugs.

If you are reading this article and thinking to yourself the solution is simple: don’t do drugs, we’d like to take a second to address why we are discussing this topic.

As a life insurance resource that specializes in high-risk insurance, many of our clients use drugs to some capacity to manage his or her disease.

While not all of our clients develop addictions to these drugs, many of them can have serious side effects that will negatively impact life insurance ratings.

In this article, we are going to treat the topic of drug addiction as we would any chronic disease.

Similar to other chronic diseases, such as diabetes, or heart disease, drug use relapse is not uncommon and, like these diseases, addiction can be managed successfully.

Understanding Substance Abuse

Substance abuse is defined as an inappropriate use of a chemical. As we’ve already mentioned, these chemicals can vary.

Technically, alcohol and tobacco are considered “chemicals,” and for underwriters, these pose difficulties when determining life insurance.

For alcohol, specifically, use itself is hard to underwriter if there aren’t any directly-related medical conditions present. This is because there is no specific level of consumption that is considered “abuse” or “acceptable.”

With other chemicals or substances, many factors influence what is defined as “abuse.” These factors can include biochemical makeup, cultural background and psychological attitude towards these substances.

This puts underwriters in a difficult position when assessing substance use as a part of an individual’s insurance application.

Barring any medical conditions specifically related to substance use, underwriters typically assess an individual’s drug use based on his or her risk of accident. These “accidents” vary widely, but can include:

  • Suicidal thoughts or actions
  • Motor vehicle accidents
  • Industrial accidents
  • Risk of criminal behavior

In terms of drug use, occupation and hobbies will also be taken heavily into consideration. High-risk occupations and diseases and evidence of substance use may result in declines or extremely high ratings.

The type of drug used is also heavily considered. Obviously, underwriters will look less favorably upon the use of illicit drugs such as heroin, cocaine, amphetamines or hallucinogens.

For prescription drugs, the frequency of the dosage and the side effects will be analyzed when considering a candidate’s risk.

Additionally, the presence of underlying psychological conditions (such as depression or bipolar disorder) can impact an applicant’s rating.

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Addiction vs. Abuse

Substance addiction, unlike abuse, is defined by NIDA as considered a chronic, relapsing brain disease characterized by compulsive drug use. This might be in the form of illicit drug use, or it may be due to prescription medication overuse.

It is defined as a “disease” because drugs alter the chemical composition of the brain and how it works. These changes can be lifelong and can lead to harmful behaviors that increase an applicant’s risk.

Substance addiction is a complex disease and, therefore, is looked at a bit differently by underwriters. All of the above risks are taken into consideration, as is the form of treatment the patient is currently undergoing.

For drug addiction, treatment is commonly a multi-step process. Behavioral counselors and occasionally other medications are used to help a patient with withdrawals and to begin helping him or her modify attitudes and behavior related to substance use.

Relapse in these forms of treatment are common, and treatment will need to consistently be monitored and adjusted. The length of time and type of treatment will be key evaluating factors in assessing a candidate’s risk.

Treatment for drug addiction often leads to treatment for other medical conditions, both psychological and physical. Your life insurance company will assess the mortality rate of the drug use. Most likely, your life insurance application will require frequent screenings.

Often including a medical exam and urine samples, these screenings will evaluate any physical deterioration and organ damage, as well as the presence of high-risk diseases such as liver failure, hepatitis or HIV.

Frequent screenings are necessary, as it is often difficult to ascertain an individual’s struggle with substance abuse by work alone. These screenings provide insurers with hard evidence of drug use and its effect on an applicant’s health.

In most cases, a strong cover letter is recommended (preferably by a counselor), and a patient will be required to adhere to a 1-2 year waiting period before being considered for coverage.

A cover letter is particularly important when applying for life insurance, as it can communicate your individual circumstances to underwriters and fill in any details surrounding your addiction.

The risks associated with drug use are taken very seriously by underwriters and insurers, so you should be sure to communicate your circumstances as accurately as possible to your agent.

In addition to the information gleaned from your medical examination, your agent will want to know the following:

  • The type of drug taken
  • The frequency of drug use
  • Any drug-related accidents on your record
  • Type of treatment being sought (This should include a list of medication being used as part of your treatment)
  • How long you have been in treatment
  • If you have had a history of mental illness
  • Any instances of relapse

Final Thoughts

Drug abuse and drug addiction are serious issues, and no one treatment is right for everyone. If you or someone you know is abusing drugs, visit the National Institute on Drug Abuse for treatment and counseling resources.

If you are concerned with how your drug use is going to impact your life insurance premium, give one of our expert agents a call today.

We know this is not an easy topic to talk about, especially with a stranger.

We want to take the time to get to know you personally and to provide you with resources and a judgment-free zone, because we believe there is a life insurance option out there for everyone, and we are committed to finding you the best one.