Insurance Facts

Soft drugs, such as weed and hashish don't mix well with one another, nor with traditional life insurance. Hard drugs, for example cocaine and heroin, make for an even tougher combination.

The probabilities of getting traditional life insurance vary between soft drug users and hard drug users and with actual history of use. They also alter between standard life insurance and imperative sickness insurance on the one hand, and simplified issue life insurance and guaranteed issue life insurance on the other.

Simplified issue life insurance typically needs no medical tests, but up to 12 health questions. For instance, Sun Life Fiscal applications for traditional life insurance ask about usage of soft drugs within the past five years but have less stringent questioning for simplified insurance. Guaranteed issue plans have no health questions or medical tests.
With traditional insurance, necessities also change with the client's age and coverage amount. Typically , insurers require some fusion of spit, blood and urine tests starting with clients in their mid-forties trying for coverage north of $100,000 or younger clients applying for $250,000 in coverage.

Understanding these differences has implications for the broker’s ability to obtain correct info for an introductory letter, while not offending a potential customer.

In the soft drug category, a marijuana user now smoking on a regular basis will probably face a decrease, while a smoker lighting up 3 to five times weekly will face a rating. Someone lighting up occasionally at a Sat. night party or less often will pay the smoker’s premium, whether or not she does not smoke regular cigarettes. Most insurers ask about the subject's prior five year history with these substances.
In a quirky sort of insurance industry bargain, a tobacco smoker who also smokes blow now and then doesn't pay any more than a ciggie smoker who never touches the weed. In another irony, medically sanctioned use of pot may actually attract increased rates since it points toward a significant medical illness.

The hard stuff

In the hard drug category, a person that has used these substances in the three to 4 years before application faces an automated decline when making an application for normal life insurance, irrespective of whether they are using it currently or latterly, Marr asserts. An insurer’s disinclination to insure a cocaine user is founded on their noticeably shortened expectancy.

If the client used hard drugs more than 3 years before the application, she or he may face a rated offer. Depending on the insurer, that could mean an increase of between 100% to 300% of the regular premium. A former cocaine use who hasn't used the drug for 6 years or longer may get the standard rate although that is not assured. Sun Life for example, asks about hard drug taking over the prior a decade and dependent on the response and tangible details, the company might or might not offer life assurance.

Handling this sensitive topic increases the need for the broker to become a talented questioner, eliciting delicate info without offending the customer. As an alternative, the broker can run through the test and then have the customer read it, answer the questions and sign the form.

Dealing with a hard drug user leaves the broker with few selections, among them choosing a simplified issue product which might supply up to $50,000 in coverage at about double the regular premium. Some insurers providing this product do not ask drug-related questions. Nonetheless some ask whether the applicant has often been dropped for other kinds of insurance. A broker working with a hard drug user should bypass trying for normal life assurance and go right to the simplified issue application, Marr commends.

An alternative choice available to the broker is an initial investigation containing a general description of the customer including their history of soft or hard drug abuse but without naming the client in particular and asking for a preliminary non-binding offer. The answer guides the broker whether to proceed with a rather more formal application, Marr explains.
As with other issues, client use of soft or hard drugs underlines the broker’s need to scribble as clear a covering letter before submission to the underwriter.

Lorne Marr is Toronto life insurance broker. He specializes in affordable life insurance.