According to the most recent data (2009) from a survey on Canadian consumption of alcohol and drugs, crack and cocaine were the most taken drugs by those over fifteen years, right after marijuana.
Although few really revel in cocaine use, compared to the 10.6% that take cannabis derivates, an average of 11% of Canadians tried one of six illegal drugs in the year of the survey. These six drugs include heroin (diacetylmorphine), ecstasy (MDMA), cocaine, speed, hallucinogens (excluding salvia) or cannabis and/or marijuana. 17.7% of men and 7.6% of women had done drugs, with youth reaching 27.3%.
Since 2004, Canadians have been abusing illegal drugs less and less. This leaves a lot of former users and addicts who will want to take out life insurance at some point.
Naturally, insurance companies do not particularly favour the use of cocaine or of other drugs. In most cases, present cocaine addiction, or other forms of recreational drugs will bring about an instant denial. This is due to the fact that unlawful drug experience is an unfavourable LINK1:pre-existing medical condition. Current drug users may still be eligible for simplified issue life insurance plans. This coverage is not contingent upon the results of medical tests and usually does not ask the applicants any drug related medical questions.
We asked four leading insurance companies and assessed how their internal guidelines deal with cocaine, heroin and ecstasy. This is what we found out:Present recreational drug addiction will bring about an instant denial.Drug use from more than 4 years ago will in all probability incur a policy rating – that is to say if there are no other underlying health issues. A policy rating is an extra expense on top of the typical plan charge. It means that the insured qualifies, but pays an additional premium premium on his or her coveragebecause the insurer accepts increased risk. Plan ratings are customarily in a multiple and can be anywhere from 50% to 400% on top of thestandard coverage price.If the client has not been involved with drugs for 4 years or more, the client may qualify for standard premiums, i.e. avoiding rating. Of course, this only holds if there are no additional underlying health lifestyle issues.We recommend contacting an insurance broker who has extensive experience working with Canadian insurance companies on underwriting drug users.
The author is an independent insurance broker and an expert on hard-to-insure clients. He works with over a dozen Canadian insurers, such as Manulife financial life insurance and Sunlife life insurance.
