Whether it is youthful indiscretion or taking the wrong route in dealing with with real life grown up issues, alcohol and drug abuse are no stranger to anyone. If we haven’t been there ourselves, we certainly know of someone who has. Some never get past it. Either they avoid treatment or go from program to program never quite finding the answer.
Because of all the the health and lifestyle repercussions of substance abuse, life insurance companies take a very serious look at the issues of drug treatment and alcohol treatment.
Even the most aggressive companies want to see at least 5 years after treatment before they will offer even standard rates. Most want to see 10 years post treatment before they will offer preferred rates. Coverage can be obtained in less time than that, but it is likely to come in the form of a rated policy. Even then, time is not the only factor. Insurance companies want to see that you are part of a support group such as NA and AA. They know the chance of serious relapse goes way down when you are serious about surrounding yourself with a support system.
They also want to see job and family stability. This is where an independent agent who is knowledgeable in underwriting these types of cases can be very valuable. The agent will know what insurance company is the best fit and how best to structure an application. A life insurance application that involves drug or alcohol abuse and treatment should always be accompanied by cover letters. I usually recommend a letter from the spouse, employer, counselor and clergy. These are people who know the extent of the problem and the extent of the recovery.
Generally if someone is 2 to 5 years out from treatment I would recommend they look at 10 year term insurance. It will be the least expensive way to get the coverage your family needs, and then once you reach the 5 or 10 year threshold, replace it with a longer term or universal life policy depending on your needs.
The good news is that your life started over when you go to treatment, and while cautiously, life insurance companies are willing to take a serious look at insuring that new life.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.