Friday, February 25, 2011

Can Cocaine Users Get Traditional Life Insurance?

According to the most recent data (2009) from the Canadian Alcohol and Drug Use Monitoring Survey, cocaine and its derivatives were the most popular drugs used by those fifteen years or older, after marijuana.

Whereas cannabis was used by 10.6% of us during the year of the survey, roughly 1.2% of people had experience with cocaine and crack. An average of 11% of Canadians experienced an unlawful drug in the same interval. Among these drugs are heroin, ecstasy, cocaine, speed, hallucinogens (excluding salvia) and, of course, cannabis and/or marijuana. 17.7% of men and 7.6% of women had tried drugs, with youth reaching 27.3%.

Since 2004, Canadians have been abusing banned drugs less and less. This leaves plenty of former users and addicts who will want to purchase life insurance one day.

Quite understandably, insurers in Canada do not really particularly favour the use of cocaine or of other drugs. Current cocaine use, or other forms of recreational drugs, will earn the applicant an instantaneous rejection. This is simply because unlawful drug use is a pre-existing medical condition. It should be noted, however, that drug users may qualify for simplified issue policies. This coverage is not subject to any medical tests and often does not have a drug related question.

We inquired four leading life insurers and scrutinized how their underwriting guidelines look at ecstasy, heroin and cocaine. Here is what we found:

  • Ongoing addiction to heroin, cocaine or ecstasy will earn the applicant a decline on the part of the insurance company.
  • If the applicant has not been involved with drugs for more than 4 years, the insurer’s quote will in all probability lead to a policy rating if the applicant is otherwise in good shape. A policy rating means for the insured that he or she pays an additional monthly premium on his or her insurance plan due to the larger risk to the life insurance company. Plan ratings are generally in a multiple and can be anywhere from 1.5x to 5x the insurer’s usual cost.
  • If the client has not been abusing drugs for over 4 years, the client may qualify for standard premiums (i.e. without policy rating). Of course, this only works if there are no underlying health and lifestyle issues.

An insurance advisor with enough experience in this specific area can help you acquire quality life insurance for a reasonable price.

Lorne S. Marr, author, is an insurance specialist and an expert on hard-to-insure clients. Lorne works with over a dozen Canadian insurers, such as London Life Insurance Company or London Life Insurance Company.

Friday, February 18, 2011

Life Insurance and a Cigar Smoker

Fancy cigars? Enjoying the occasional stogy might cost you much more than the $150 you paid for that pack of White Owls. That is, it could drown a fortune in extra life insurance premiums.

What does one do to reduce the impact of the habit of smoking cigars on the premiums? Well, most insurers allow you to have a cigar from time to time – usually once per month. Canada Life, for that matter, which tolerates one cigar as often as each week. Unity Life, on the other hand, offers a special cigar rate.

If you are , refrain from smoking cigars for at least a week so there is no lingering cotinine—a nicotine metabolite—in your body. The levels of cotinine in a person is used to measure one’s inhalation of tobacco smoke. Nicotine is “digested” by the body into cotinine, and that has a half-life of approximately twenty hours. This means that the substance’s levels will halve every twenty hours. Past the initial 20 hours, cotinine levels will sink to half, after the next 20 hours to quarter, etc. For these reasons, it is safe to expect any dose of cotinine to be metabolized untraceable after four days.

Insurance premiums for cigar smokers differ sharply from one company to another – and can quite possibly make up $40,000 over the duration of the policy.

As general advice, it is a very good idea to be truthful when applying for coverage. Until a policy has been in force for twenty-four months, the insurer has the right to contest it for misinterpretation or omission of a material detail. The ‘incontestability period’ varies depending on the life insurance company.

Smokers in general are best attended to by a knowledgeable independent broker who understands the underwriting guidelines of a range of insurance companies and keeps up-to-date on all amendments thereto. The same holds true for anyone with pre-existing medical conditions.

Written by L. Marr, Toronto insurance broker and financial advisor. Lorne has been working in life insurance in Canada for over a dozen years.

Tuesday, February 8, 2011

January round-up

Welcome. Traditional selection of the best articles is ready. January brought us several interesting articles. The main topic was stroke and life insurance.

Couple of articles, like this insurance article on squidoo, or this stroke-related on active rain talked about your chances to purchase life insurance policy after suffering a stroke. This one on hubpages dealt with stroke insurance and patients.