Life Insurance and Alcohol Consumption

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

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 summers afternoon watching the cricket, there's no shortage of occasions where alcohol consumption is encouraged and sometimes expected.

But despite our national drinking culture, it's also widely accepted that excessive alcohol consumption can have a number of detrimental consequences for your health, such as:

  • Liver disease
  • Long-term heart damage
  • Stroke
  • Elevated blood pressure levels
  • Accidental injury and even death

And it's for these very reasons that alcohol abuse can negatively impact your life insurance premiums if, and when you apply for a policy.

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.

Due to the many health issues associated with excessive alcohol consumption, not to mention the possibility of injuries from alcohol-related accidents, underwriters will take your alcohol intake into consideration when assessing your application.

When you apply for life insurance you may be required to complete a questionnaire related to alcohol consumption. Typical questions can include:

  • Number of standard drinks per day.
  • If you have suffered any medical 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 of your questionnaire you may be required to undertake additional medical testing. Details of your driving records may also be requested to check for any signs of alcohol abuse.

What is the accepted alcohol intake by an insurance provider's standard?

The maximum amount of alcohol units per week that is generally accepted by many insurance providers is:

  • 21 for men
  • 14 for women

Alcohol units are measured by standard drinks, which in Australia contains 10 grams of alcohol (12.5ml of pure alcohol).

  • A full-strength stubby or can of beer (375ml) contains 1.4 standard drinks
  • A 100ml glass of wine contains 1 standard drink
  • A shot of spirits is equivalent to 1 standard drink

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?

Several symptoms that can signify health issues due to excessive alcohol consumption exist, and will be looked for during your medical examination. In the early stages of alcoholism the symptoms can include blackouts (where you have no memory of what happened while you were drinking), accidents and sicknesses you can’t explain. You can also develop physical problems and previous health issues may worsen.

As alcohol dependence worsens, long-term heavy drinkers generally start to experience more noticeable and definable symptoms, which can include:

  • 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

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. However, if you are a recovering alcoholic, you will more than likely be able to obtain cover. Some advice to think about if you are a recovering alcoholic and are seeking life insurance is:

  • Document the improvements giving up, or substantially cutting down your alcohol intake has had on your health. Some insurance providers will offer you cover within a minimum of five years without relapse.
  • Ask your doctor to help you with outlining how your health has improved. Evidence supported by a health care professional can lend credibility to your application.
  • If you are attending Alcoholics Anonymous meetings, or have successfully completed any other rehabilitation programs, inform your insurer of this.
  • Insurers may take into account DUI convictions when deciding whether or not to cover an applicant, so if you have an unblemished driving record provide a copy of that to them.
  • Providing medical proof that you have a healthy liver can also be beneficial.

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