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Can Cocaine Users Get a Traditional Life Insurance Policy?

By Edited Sep 5, 2015 0 0

What the Numbers Say about Canadians

According to 2009 data from a survey on Canadian use of alcohol and drugs, cocaine and its derivative forms were the most used drugs by those over 15 years in the past year, right after cannabis.

Whereas cannabis was used by more than 10% of us in 2009, cocaine and its derivative drugs was used by roughly 1.2% of Canadians. Nearly 11% of Canadians tried out an forbidden drug in the same period. These six drugs include cannabis and/or marijuana, cocaine, amphetamines, ecstasy (MDMA), hallucinogens (excluding salvia) and heroin (diacetylmorphine). 17.7% of men and 7.6% of women had abused drugs, with youth reaching a whopping 27.3%.

Since 2004, Canadians have been using banned drugs less and less. This leaves many addicts and former users who will look for life insurance in the future.

How Insurers Treat Drug Users

Life insurers in Canada do not deal with cocaine use or other harsh recreational drug consumption very approvingly. Current cocaine addiction, or other forms of recreational drugs, such as heroin or ecstasy, will bring about an instant dismissal. This is simply because illegal drug abuse is an unfavourable pre-existing medical condition. Current drug users may still have a chance with simplified issue life insurance plans. These policies have no medical tests as a pre-condition and usually do not ask drug related medical questions.

This is how major life insurance companies look at cocaine, heroin and ecstasy:

  • Present drug abuse will earn the applicant an automatic denial.
  • If the applicant has not been abusing drugs for 4 years or more, the insurer’s quote will probably bring about a policy rating – that is to say if there are no continuing health issues. A policy rating means that a qualified insured pays an additional premium because the life insurance company carries heightened risk. Plan ratings are generally in a multiple and can be anything from 1.5x to 5x the standard tariff.
  • If the applicant has not been abusing drugs for more than four years, the applicant may be entitled for standard premiums (i.e. without policy rating). Of course, this only holds if he or she is in good health and has no lifestyle problems as an effect of the past addiction.

We recommend talking to an independent insurance adviser who has experience in working with Canadian insurers on underwriting current or former drug users.

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