Yes, drinking alcohol can effect whether a life insurance policy is paid or if an insurance applicant is approved for coverage.
If an insured confesses that they consume alcohol on their original application for life insurance, the insurance adjuster will take that into account when designing the policy. Life insurance firms frequently justify denials of life insurance claims by claiming that alcohol usage can alter the amount of premiums an insured will pay, and may even result in their application being denied.
How does alcoholism affect life insurance?
If you drink frequently or have a problem with alcohol, it can impair your life and future plans in a variety of ways. If you have life insurance or are considering getting one, you may be concerned about how your drinking habits will influence your coverage.
Unfortunately, the answer is that it most likely willin a variety of ways. A person who merely drinks once in a while will have no trouble qualifying for life insurance. However, if you are a heavy drinker. If you have a medical condition that is causing you troubles, a life insurance company would most certainly consider you a high-risk customer. It’s possible that you won’t be able to purchase life insurance because of this.
We’ll go over how alcohol usage affects your life insurance policy and rates, what happens if you don’t declare your alcohol use, and what you can do to better your condition in the sections below. Overall, the best course of action is to be open and honest about your health and well-being, and to take the best possible care of yourself.
Can life insurance claim be denied for alcohol?
Simply put, life insurance firms profit only if they do not have to pay claims. They would never be profitable if they had to pay out a claim for every single customer who bought a life insurance policy. As a result, businesses are constantly looking for grounds to refuse claims. A company’s decision to refuse a claim is frequently based on the presence of alcohol. Abuse and misuse of alcohol can result in major health issues such as liver disease, cancer, strokes, and more. In addition, alcohol intoxication can lead to riskier behavior, increasing the chances of a premature death. Companies would be forced to pay claims even if the death was directly connected to alcohol use and could have been averted if there were no alcohol intoxication exclusions and other exceptions. Our life insurance lawyers recently won a $100,000.00 Globe life insurance claim that had been denied due to intoxication.
The following is a list of common situations in which life insurance plans decline claims involving alcohol:
Life insurance firms are able to include exclusions linked to alcohol use in policies in the majority of states. Insurance companies that have an alcohol intoxication exclusion will likely deny the claim if the insured was inebriated or consuming alcohol at the time of their death, even if the death was not directly due to their alcohol usage.
When you take out a life insurance application, you will very certainly be questioned about your alcohol consumption, including how often you drink, how much you drink, and whether you have had treatment for alcoholism in the past or present. If you lie on your application and say you never drink or have never suffered with alcoholism, and then you die with alcohol in your system, the employer will look into it. Any claims will be refused if they discover that you lied or withheld the truth.
The company will deny a claim if an insured person dies as a result of alcohol abuse. This will result in a denial, whether the accident occurred because the insured was intoxicated, such as falling off a roof, or the death was a direct result of alcohol poisoning.
In most cases, life insurance policies have a two-year contestability term. This means the firm can fight the payout if the insured dies during the first two years. When a death happens within this time, the firm will review the information on the application, medical questionnaire, and any other papers given in order to determine whether or not the claim should be denied. If the insured dies for reasons unrelated to alcohol, but the insurance company discovers that the insured lied about drinking alcohol on their application, they will try to deny the claim.
Any refused life insurance claim or life insurance beneficiary dispute can be won by our life insurance lawyers.
Do life insurance companies check for alcohol?
You should halt or minimize your coffee and alcohol intake one to two days before your life insurance medical exam. Furthermore, you should reduce your workout habit, since this can result in an increase in proteins in your urine.
If you want to be extra cautious, there are a number of chemicals and foods that have the potential to cause erroneous exam results. Medical testing has improved greatly over time, so you may want to avoid the following tests, even though they are unlikely to cause problems:
What reasons will life insurance not pay?
If you lie about any risky activities, medical illnesses, travel plans, or your family’s health history on your insurance application, the insurance company may refuse to pay out the death benefit. The best approach to avoid surprises later is to be as honest and comprehensive as possible during the underwriting process.
Risky hobbies
Depending on the conditions of your policy, your insurer may refuse to pay the death benefit if you die while participating in a dangerous activity you routinely enjoy (such as flying a private plane, bungee jumping, or scuba diving).
If your pastime is dangerous enough, your insurer may include an exclusion to your policy that prevents payment if you die while participating in that dangerous activity. This exclusion will be disclosed to you before you sign the policy (there are no hidden exclusions). Amateur pilots, for example, may require an aviation exclusion rider in order to be covered by life insurance. Their beneficiaries will not receive the death benefit if they die in a plane crash.
Murder
Because of the slayer rule, if your beneficiary murders you, they will not receive the death benefit. The slayer rule prohibits the payment of a death benefit to someone who has murdered or is directly linked to the murder the insured. In this case, the insurance company will instead pay your prospective beneficiaries or your estate the death benefit.
Deaths that happen when you’re doing something illegal are usually not covered by insurance. Most policies will not cover death that occurs while performing a crime, for example.
Suicide
Suicide is usually covered by life insurance, with one exception: life insurance contracts have a suicide clause that prevents payouts for suicide deaths in the first two years of coverage.
Suicide clauses are in place at insurance firms so that applicants cannot commit suicide shortly after their life insurance policy expires.
Why would a life insurance claim be denied?
When you obtain a life insurance policy, there’s a potential that your beneficiary’s claim will be refused, and it’s critical that you understand why.
If a carrier believes that you have broken the terms of your insurance, it may refund your premiums to your estate and pay nothing to your beneficiaries.
1. The death happened during the contestability period.
Policies include contestability periods that normally remain in place for two years after they’re purchased, says Glenn Kantor, a life insurance attorney in San Diego.
If you die within the contestability period, which is usually two years from the date you bought your policy, your insurer might look into whether you filled out your life insurance application correctly.
Even if the cause of death had nothing to do with the deception, the carrier may refuse to pay the death benefit if you misrepresented on your application.
If you lied about a medical condition and then died in a car accident unrelated to that condition, your insurer may still refuse to pay the death benefit.
A slight omission, such as failing to record that you’ve seen a doctor in the previous year, is unlikely to result in a denial.
Such misrepresentations usually do not preclude benefits from being paid if you survive the contestability period.
According to Steven Weisbart, chief economist for the nonprofit Insurance Information Institute, if an insurer believes a policy was obtained in order to murder the insured and collect the benefit, the claim will be denied, even if the contestability time has past.
A Florida man was found guilty in April 2014 of killing his newlywed wife in order to collect on her $1 million life insurance policy.
Surprisingly, Weisbart argues, plans to collect life insurance payouts by murdering the insured are not uncommon.
2. The policy did not cover the type of death.
According to Weisbart, life insurance used to utilize a range of exclusions based on the cause of death.
Insurers will often refuse to pay a claim if the insured dies while participating in a dangerous pastime such as skydiving or scuba diving. A common exclusion was dying in a war.
That, according to Weisbart, is no longer the case. Suicide is the only life insurance policy exclusion that is still widely used today. Even the suicide exclusion, he adds, is often waived if the death happened after the contestability period.
3. You failed to disclose personal information that was relevant.
Kantor says the most common reason insurers provide for refusing life benefits is if you fail to disclose information needed to appropriately estimate the risk of a policy payout.
“If you asked for coverage and didn’t answer the questions honestly,” Kantor argues, “that’s grounds for them to refuse your claim.”
Not every faulty information is grounds for refusal, such as writing a wrong address or driver’s license number, Kantor says. These would be deemed mistakes rather than deliberate misrepresentations.
If you fail to disclose convictions for driving while intoxicated, you may be denied, but only if the conviction is discovered during the contestability period. Weisbart notes that once the contestability period is up, these convictions are usually not utilized to dismiss the claim.
Even if they’re discovered after the contestability period has finished, some misrepresentations of facts are grounds for refusing or decreasing a death benefit, according to Weisbart.
For example, if the insurer discovers that you persuaded a physician to supply misleading information in order to conceal a medical problem, a death benefit claim will be denied.
4. You didn’t pay your insurance premiums on time.
Policyholders are held to the terms of their policies by insurers. You won’t be able to collect on a life insurance coverage if the premium was let to lapse, according to Weisbart.
According to Benjamin Blakeman, a Los Angeles attorney, elderly policyholders frequently have memory issues, which cause them to miss payments, resulting in policy cancellations. A grace period of at least 30 days is usually included in most policies, during which you can pay the premium owing without incurring interest.
According to Weisbart, having your premium payments withdrawn automatically from your bank account is one approach to avoid having your coverage lapse.
Policies having a cash value, such as whole life insurance, frequently feature a clause that allows the carrier to borrow against the policy’s value to pay past-due premiums. However, this only covers the insurance for as long as there is enough cash value left.
If you’re a beneficiary who believes you wrongfully were rejected a life insurance claim, your first action should be to contact the insurer, says Brian Ashe, treasurer at life insurance advocacy charity, Life Happens. There is an appeals process for each carrier.
If you can convince your insurer that their judgment was erroneous, Ashe says, the situation may be resolved administratively rather than in court.
Before contesting a claim denial, Kantor advises that you seek expert legal assistance to ensure that you understand your rights.
According to Blakeman, persuading insurers to overturn a judgment is tough. He claims that when an attorney is involved in the issue, carriers take the appeals more seriously.
Can I drink alcohol before a life insurance exam?
Avoid alcohol for a few days before your life insurance exam since it dehydrates you and can alter your liver enzymes, which are measured in your blood. Increase your water consumption as well. To assist wipe up contaminants that may show up in your blood or urine sample, medical examiners recommend starting consuming eight glasses of water a day the week before the exam. It’s also easier to collect blood when you’re well hydrated. Because the caffeine in coffee can alter your blood pressure, it’s better to save your morning coffee for after your life insurance exam.
What percentage of life insurance claims are denied?
What can add to the emotional anguish of a family member’s death? For a select few, it’s the refusal of life insurance payouts that would have helped them bridge the financial gap left by the loss of a loved one.
Almost all life insurance claims are paid out as predicted. Fewer than one out of every 200 claims is denied, according to the American Council of Life Insurers (ACLI). However, beneficiaries who do not collect on insurance may find this comforting, especially since death benefit settlements are often all-or-nothing deals. According to Juan Carlos Cruz, founder of the Brooklyn-based Britewater Financial Group, when a claim is refused, the full amount is usually not paid out. “There is no such thing as a partial payment.”
Here’s everything you need to know about life insurance claim denials, including what you or your loved ones can do right now to reduce the chances of ever receiving one.
Can life insurance be contested?
After the insured’s death, anyone with a valid legal claim can contest the beneficiary of a life insurance policy. A dispute is frequently started by someone who believes they are the policy’s rightful beneficiary.
Contesting the beneficiary of a life insurance policy is difficult, and it’s nearly always a lengthy and costly procedure. A named beneficiary cannot be removed by an insurance company. A life insurance beneficiary can only be overturned by a court.
How long after death do you have to collect life insurance?
When the insured dies and the policy’s beneficiary files a claim, life insurance companies pay out the proceeds. After you’ve filed the completed claim papers and supporting paperwork, you should be able to collect your life insurance payout within 30 to 60 days. However, insurers are known for finding reasons to excessively delay and even refuse a valid life insurance claim.
Read our blog about how long it takes for insurers to pay out if you want to know what you need to do to get your life insurance payout quickly.
What kind of deaths are not covered in life insurance?
Term policies cover death caused by any critical illness. HIV/AIDS and other sexually transmitted diseases are included.
If you have a pre-existing illness, you must report it when acquiring a Term insurance policy. If the sickness is the cause of the policyholder’s death, the nominee is only entitled to the payout if the disease was revealed at the time of purchase. If you have a life-threatening sickness, your premiums will likely be higher, but in the event of a payment, the claims process will be smoother. This is why, when applying for term insurance, financial companies need you to take a medical exam.
Death from an overdose of alcohol or drugs is likewise not covered by a Term Insurance policy.
We’ve all heard stories about policyholders being murdered for money by the nominee. If an investigation indicates that the candidate was involved in the death of the insured, the nominee will not be entitled to death benefits until the judge acquits him.
Term insurance does not cover death caused by a natural disaster or act of God, such as a tsunami, earthquake, or flood, unless you have purchased specific riders for that purpose.