Life Insurance 4431 views April 11, 2020

Does Life Insurance Cover Alcohol-Related Deaths?

Having the financial security of family and children is one of the biggest goals of one’s life. Life insurance is one such tool that helps us in ensuring the same. Term insurance plan is the basic life insurance plan that provides a lump sum death benefit to the family members in the case of an eventuality. It is one of the most popular insurance tools for two reasons i.e. affordable premium rates and higher coverage. However, in the event of death under certain circumstances, the insurance providers deny claim payment. The types of death or details of such exclusions are specifically mentioned by the insurance provider. Let us understand whether death due to alcohol abuse or alcohol influence is covered or not under the term insurance plan.

Term Insurance

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What is Alcohol Abuse?

Alcohol Abuse refers to a type of condition characterized by excessive drinking of alcohol. It refers to a pattern where the person irrespective of knowing the side-effects of alcoholism on health and lifestyle makes it a part of daily routine. Excessive consumption of alcohol exposes an individual to the probable risk of liver diseases, mental diseases like depression, stroke and cardiovascular diseases.

Role of Insurance Providers

As the probability of a shorter life span is higher for individuals facing alcohol abuse, it is important for insurance providers to know your alcohol intake pattern. Most of the insurance providers will provide insurance coverage, however, they will charge an extra premium amount for customers having a history of excessive alcohol drinking.

The insurance provider, before offering the insurance plan, will consider various factors and decide whether or not to provide insurance coverage. In case you have a history of alcoholism, the insurance provider will provide you coverage but under a ‘rated’ policy. However, if your alcohol intake is more than warranted, chances are insurance providers might reject your insurance application.

Insurance and Payment of Benefits

Insurance providers might provide you insurance coverage but the payment of benefits depends on the circumstances of death along with the terms and conditions of the alcohol-related deaths under the life insurance policy. 

Under death due to alcohol abuse or accidental death under alcohol influence, the insurance provider may deny the claim even after providing coverage. The most important aspect in cases of life insurance cover under alcohol-related deaths is whether or not you have disclosed the history of alcohol consumption. If you under any circumstances remain dishonest with the insurance provider at the time of life insurance purchase, chances are that your family will not receive the payment. It is very important to disclose the entire history of alcohol intake, mental health, or any prior history of alcohol drinking behaviour to the insurance provider.

If in the case of an eventuality, the insurance provider witnesses any minor concealment of facts related to alcoholism, the insurance company will contest a claim and chances of claim rejection in such cases are higher.

Final words

It is important to secure the financial future of your loved ones but alcoholism and concealment of such facts from the insurance provider will lead to rejection of the claim. Hence it is advised to be upfront about all your medical and mental conditions with the insurance provider.

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