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When an insurance company looks at an application for a policy, they will assess the risk of a claim. The higher the risk that a claim will happen, and the sooner the claim might happen, the higher the premium the company may charge for the insurance.
Multiple factors, including your age, job, hobbies and family medical history will form part of this assessment. Another factor that will be looked at is your own health and lifestyle – and this includes the amount of alcohol you consume.
Why is alcohol a risk factor for life insurance?
The Office for National Statistics looked at alcohol-specific deaths registered in 2019. They found that 7,565 deaths were registered in the UK from health conditions that were a direct result of alcohol misuse, such as alcoholic liver disease and accidental poisoning by alcohol.
Alcohol can also be a factor in other conditions, even if it is not specifically mentioned as a direct cause of death. These include some forms of cancer, stroke, cardiac arrhythmias, diabetes and high blood pressure.
Alcohol and suicide
Another reason that insurers might be concerned about alcohol consumption is the link between alcohol and suicide. Writing for the Institute of Alcohol Studies, Jonathan Goodlife says: “Some people, usually addicted to alcohol or other depressant drugs, often with co-morbid mental health problems, take out a life policy. Their intention is to commit suicide in order to provide for their families.”
Life insurance policy terms and conditions typically rule out a payment if death is from suicide in the first twelve months after someone takes out a policy. If someone dies from suicide after that 12-month period, the insurer may check the person’s medical records. If they find that the person was not honest about their alcohol consumption when taking out the policy, the insurance company may deny the claim.
How do insurers assess alcohol-related risk?
Because of the risk involved, insurance companies will want to understand someone’s alcohol consumption when they apply for life insurance, and other benefits such as critical illness cover.
A life insurance application is likely to include questions about how much alcohol you drink. This might be in the form of a question about how many units or drinks of alcohol you have each week. The insurer will typically provide information confirming their definition of a unit or drink.
You may be asked further questions, either within the main application or as supplementary questions. These might ask if you have liver damage, have been advised to reduce your alcohol consumption, asked to attend an alcohol support group, or been banned from driving due to drink driving. Insurers may also be particularly interested in your alcohol use if you have certain occupations, such as a publican.
An insurer may also write to your GP to ask them about their understanding of your alcohol consumption, or request that you attend a medical examination.
How do insurers respond to an applicant’s alcohol consumption?
Someone may be charged more for life insurance if their alcohol consumption is above a certain level. A 2023 guide by Zurich Assurance puts this at 30 units per week (or 15 drinks). However, they also take into account how often someone drinks: the threshold might be lower if someone tends to drink less often, but consumes a greater quantity each time.
Some people will be denied life insurance (known as being declined) if their consumption is above a higher level. Zurich say that this is 50 units per week (the equivalent of three or four drinks per day).
Insurers will look on a case-by-case basis at people who used to drink large quantities of alcohol but who now drink less, such as recovering alcoholics.
What are alcohol exclusions?
Life insurance companies will typically include what’s known as exclusions in their policy conditions. These are specific circumstances in which they will not pay out when the policyholder dies. They may include alcohol-related exclusions, such as death from drunk-driving and chronic alcoholism. Please check your insurer’s terms before taking out the policy.
The importance of ‘full disclosure’
Remember that life insurance companies can check someone’s medical records after they die. If they find that the person was not honest about their alcohol consumption when taking out the policy, the insurance company may deny the claim.
This is why it is so important that you are completely honest when answering questions as part of a life insurance application. If you are not honest, there is a risk that the claim will be denied, and the policy won’t pay out. That could have severe and damaging financial consequences on people left behind after a bereavement.