Life Insurance and Alcohol Consumption

Everything you need to know about how alcohol consumption can affect your life insurance premiums

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Australians have a well-earned reputation for liking a drink or three. Whether it be counting down the minutes to beer o'clock on Friday to drinking away a summer's afternoon watching the cricket, there's no shortage of occasions where alcohol consumption is encouraged and sometimes expected.

Despite our national drinking culture, excessive alcohol consumption can negatively affect your health and, by extension, your life insurance premiums.

How is alcohol consumption treated by life insurers?

When you apply for a life insurance policy, a process known as underwriting will be used to assess your individual risk, and therefore, how high your insurance premiums should be.

Like any other lifestyle choice, insurers will evaluate your drinking habits in terms of how they impact your long-term health and thus your chance of making a claim. Since excessive alcohol use can lead to strokes, liver disease and heart damage, as well as result in accidental injury or death, alcohol consumption is treated seriously. That's why underwriters will take your alcohol intake into consideration when assessing your application.

What does a life insurance alcohol questionnaire contain?

When you apply for life insurance, you are likely to need to complete a questionnaire related to alcohol consumption. Typical questions can include:

  • Number of standard drinks you consume per day, and/or how often you consume alcohol
  • Whether you have ever changed your daily alcohol consumption from what you currently consume
  • If you have suffered any medical conditions (including mental health conditions) related to the consumption of alcohol
  • If you have consulted a doctor or sought medical counselling relating to alcohol consumption
  • If you have had to take time off work due to alcohol consumption

Based on the results, you may require additional medical or rehabilitation programs to secure life insurance, which is covered in the section below.

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Updated January 25th, 2020
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Is it possible for alcoholics to apply for life insurance?

If you are a confirmed alcoholic who is still drinking heavily, the chances of you obtaining life insurance cover are slim. But if you are a recovering alcoholic, you will more than likely be able to obtain cover.

Some steps to take if you are a recovering alcoholic seeking life insurance are:

  • Document your improvements. Record any proof of your efforts to cut down or give up alcohol consumption. Some providers will offer you cover within a minimum of five years without relapse.
  • Ask your doctor. Your healthcare professional may be able to help outline how your health has improved, which can lend credibility to your application. Medical proof of a healthy liver may be especially beneficial.
  • Attend rehabilitation. If you are attending Alcoholics Anonymous meetings, or have successfully completed any other rehabilitation programs, inform your insurer of this.
  • Keep your driving record clean. Insurers may take into account Driving Under the Influence convictions when deciding whether or not to cover an applicant. A clean driving licence can help.

What is the accepted alcohol intake by insurers?

The maximum amount of standard drinks per week generally accepted by many insurance providers is:

  • 21 for men, or about 3 per day
  • 14 for women, or about 2 per day

A standard drink contains 10 grams of alcohol in Australia. A 100 mL glass of wine, a shot of spirits, or 300 mL of beer each contain about one standard drink's worth of alcohol.

If you exceed the recommended number of drinks per week, your premiums are very likely to rise. A history of alcohol abuse is even worse, bringing an additional loading somewhere between 50 to 200 per cent on top of your base life insurance policy (NobleOak, 2013).

What if my alcohol intake is significantly higher than this standard?

If you consume more alcohol than the recommended 21 standard drinks per week, this will be viewed as an increased level of risk by your insurer and you can expect your premiums to rise. As the likelihood of you suffering health problems and needing to make a claim increases, so will the amount you have to pay to take out cover.

An additional loading that can range from 50 to 200 per cent will also apply to your life insurance policy if your medical examination reveals signs of alcohol abuse (NobleOak, 2013).

What are the red flags that can indicate alcohol abuse?

If you're planning to undergo a medical examination, there are several symptoms signifying health issues due to excessive alcohol consumption. The early symptoms of alcoholism can include blackouts, accidents and hard-to-explain sickness.

Prolonged alcohol dependence can lead to more noticeable and definable symptoms, including the following:

  • Lack of appetite and weight loss
  • Small blood vessels on your skin
  • Redness on the face, especially on the nose and cheeks
  • Impotence
  • Swelling of the palms of hands
  • Sore or upset stomach
  • Unsteadiness when on feet
  • Liver problems

Alcohol dependence is a real and insidious problem that could impact anyone. Be aware of the signs, and take action by reading our guide on quitting drinking, contacting the National Alcohol and Other Drug Helpline and talking to your doctor or therapist.

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