Can you still get life insurance with a history of recreational drug use?

2020-10-26
The reality is, you can never be sure of whats in a drug and how strong it is, or of the effect its going to have on you. The reality is, you can never be sure of whats in a drug and how strong it is, or of the effect its going to have on you.

Can you still get life insurance with a history of drug use?

There's one thing we can all agree on and that's 'Life is complicated at times'.

Getting on with life today regardless of our decisions yesterday is even more complicated; so it's important to talk about what matters most and know where we stand.

  • In 2019, around 3.4 million Australians reported using an illicit (recreational) drug in the last 12 months.1

So how does having a history of personal drug use affect your ability to get life insurances and create a safety net for yourself and your family?

Here's what you need to know ahead of time, when getting your life insurances sorted and have previously used recreational drugs.

Jump Ahead

Here's one of the questions we get asked a lot

  • "If you've used recreational drugs in the past, does this affect your ability to get Life Insurance or Income Protection and set up a safety net for yourself or your family?"

The most important thing to understand when it comes to recreational drugs and applying for life insurances is that for the most part it really does depend upon your individual situation, your occupation, your overall health and whether your drug use was intravenous or otherwise.

It's Chemical; not Moral

Underwriting life insurance applications is all about understanding the big data behind all of life's activities, and not so much the reasons for the decisions we make.

  • This means that if there is not yet a lot of available actuarial grade big data available about a particular drug/activity/occupation and its predictable outcomes, it's either off limits or very hard to work with.
  • Understanding the underlying increased chemical risks of drug use, is the driving force here.

A past drug use history of past recreational drug use, when understood better and its context explained in detail, can often be disregarded if the use is in the past.

How long is 'in the past' you ask?

Well that goes back to my earlier comment about it depends your individual situation, your occupation, your overall health and whether your drug use was intravenous or otherwise

  • As a rule of thumb, at least three years of being drug free is usually needed when working with a single type of drug use, might mean a person's medical and health history has become predictable to the point where their life insurance options are within reach.
  • A five year drug free period is usually needed when we’re working with repetitive drug use, depending upon; your individual situation, your occupation, your overall health and whether your drug use was intravenous or otherwise

Current drug use brings additional unknowable health risks into play, one of which is you simply have no control over the composition (purity) of an non-prescribed drug and how it might affect you and any associated health issues that you may or may not know about.

You do need to be aware that some particular types of drug are statistically seen as leading on to ‘harder’ drugs or might be showing significant health risks in emerging big data studies and bring a combination risk that is usually too difficult to clearly understand so would trigger an automatic decline in an application for cover.

How does the growing legalisation of Cannabis (Marijuana) affect the question of recreational drug use?

As Cannabis/marijuana use becomes decriminalised in more and more Australian states, some life insurance companies have started to soften their underwriting attitude towards current cannabis use.

  • But, along with Vaping and smoking e-Cigarettes, you should be prepared to have to pay smokers rates on their life insurance policy premiums.

Here are eight sample questions you'll need to be prepared to answer during a life insurance application.

  1. What are the types of recreational drugs you have used?
  2. What was the period of use (approximate dates from and to etc.)
  3. Have you ever had any health condition or impairment relating to the use of drugs (e.g. Hepatitis, HIV infection, mental illness)?
  4. Have you ever sought medical treatment or advice or been referred for drug counselling?
  5. Have you ever been treated on a methadone or other controlled withdrawal program?
  6. Have you ever taken time off work because of your alcohol or drug use or have your working duties ever been affected or restricted in any way?
  7. Are you now drug-free?
  8. When did you stop?

The important message is, Take Action Today

While it's impossible to provide a one-answer-fits-all-insurance-companies statement here about the effect of past drug use will have on a life insurance application - the important message is this:

Don't ignore an opportunity to understand your position and begin to get your insurance sorted today, just because you don't yet know all your options.

Give us a call and we can do a confidential pre assessment for you to test the water, before we both jump in together.Drew Browne

Contact us today and see if we're the type of people you'd like to work with.

[1]Data Source: National Drug Strategy Household Survey 2019.

Drew Browne

Drew specialises in helping people protect and provide for what matters most in their lives. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His company Sapience Financial is committed to using business solutions for good in the community, and in 2015 certified as a B Corp. In 2017 Drew was recognised in the inaugural Australian Westpac Businesses of Tomorrow National Awards. Drew writes for successful Small Business Owners and Entrepreneurs at Smallville, his blogs can be read on Amazon.com and you can connect with him on LinkedIn.

Any advice provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.

drew browne pic

Drew Browne

Sapience Founder & Director.
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