Life Insurance: Medication's Impact On Eligibility

Life insurance is a financial safety net for your loved ones after your death. However, getting approved for life insurance is not always straightforward. It is possible to be denied life insurance due to your prescription history, but it is uncommon. People are typically denied life insurance because they fall into a high-risk category, often due to health challenges like diabetes, obesity, or a previous diagnosis of serious disease. Non-medical reasons for denial include risky hobbies, dangerous jobs, a criminal record, or a history of DUIs or speeding tickets. If you are denied life insurance, you can review the reason for denial, appeal the decision, try a different insurance provider, or look for alternative coverage options.

Medical history

Your medical history is one of the most important factors that life insurance companies consider when assessing your application. This includes your prescription history, which can be accessed by insurers via databases such as the Medical Information Bureau (MIB) and Milliman Intelliscript. While it is uncommon to be denied life insurance solely on the basis of your prescription history, it can happen.

Prescription history can provide insurers with information about the nature and scope of underlying health conditions. For example, certain medications and their dosages can indicate the presence and severity of conditions such as rheumatoid arthritis, ulcerative colitis, lupus, heart attack, stroke, pulmonary embolism, schizophrenia, major depressive disorder, acute mania, and borderline personality disorder.

Insurers are particularly concerned with medications that are linked to more serious health conditions, as these can significantly impact your premiums or policy options. For instance, narcotic dependence medications such as Suboxone (buprenorphine) or methadone may disqualify you from traditional life insurance until you have been drug-free for several years. Similarly, immunosuppressants, blood thinners, and antipsychotics can increase your premiums due to the associated risks.

It is important to be transparent and disclose all pre-existing conditions and medications during the application process. Withholding or providing false information can be considered life insurance fraud and may result in the denial of a claim.

Non-medical reasons

While medical reasons are a common cause for life insurance application denials, non-medical reasons can also lead to a rejection. These are some of the non-medical reasons why your life insurance application might be denied:

• Engaging in risky hobbies and behaviours: Insurance companies are generally reluctant to insure individuals who participate in dangerous activities such as skydiving, auto racing, rock climbing, surfing, or base jumping.
• Driving record: A history of driving infractions, such as speeding tickets, reckless driving, or accidents, can increase your risk profile and lead to a denial. A single DUI or DWI may not be an issue, but a pattern of such offences could result in a rejection.
• Criminal record: A history of criminal activity or a previous conviction can be a red flag for insurers and may result in a denial of coverage.
• Financial history: Insurers may deny coverage if you have a history of bankruptcy, significant debt, or low income. They may question your ability to afford the premiums and view you as a higher risk.
• Employment: Certain occupations are considered high-risk by insurers due to their dangerous nature. For example, active-duty military service members or roofing workers may struggle to obtain life insurance.
• Smoking: Smokers often face higher premiums or even denial of coverage due to the associated health risks.
• Drug use: A positive drug test for illegal substances will almost certainly result in a denial of life insurance coverage.
• Age: Older individuals may find it challenging to obtain term life insurance, and the policy terms for this type of insurance tend to get shorter with age.

It is important to note that each insurance company has its own underwriting standards, and being denied by one insurer does not mean that all others will reject your application. Working with an independent insurance broker or agent can be beneficial, as they have a broader view of the market and can guide you towards insurers that are more likely to approve your application.

Drug use

When applying for life insurance, it is important to be fully honest and transparent about past or present drug use. This includes disclosing information about smoking habits, alcohol consumption, and substance use. While casual substance users can generally expect to find coverage, those with a history of substance abuse, especially with hard drugs, may face challenges in obtaining life insurance.

If you have a history of substance abuse, you may not qualify for a policy unless you have been drug-free or out of rehabilitation for several years. Even then, you may pay more for coverage. Most applicants will undergo a life insurance medical exam, which includes testing for drug use and abuse. It is important to disclose drug use during the application process, as failing to do so could result in the insurer rescinding its offer or denying a future claim.

The impact of drug use on life insurance also depends on the type of drugs involved. For example, the use of commonly prescribed opioids, such as oxycontin, fentanyl, or morphine, may be viewed differently from illegal drug use. Life insurance companies are concerned about the potential for abuse and the associated health risks, such as an increased risk of premature death, heart disease, and other serious health conditions.

In summary, drug use can affect your eligibility and rates for life insurance. It is important to be transparent during the application process and seek help if you are struggling with substance abuse. While casual drug use may not disqualify you from obtaining life insurance, it is essential to understand the potential impact on your coverage options and costs.

Prescription history

In the US, life insurance companies can only access your prescription history with your consent. When you sign your application, you'll also sign a HIPAA form that authorises the insurance company to access your health information. This means that, while it is possible to be denied life insurance due to your prescription history, it is uncommon.

If you are denied life insurance, it is most likely to be because you fall into a high-risk category, often due to health challenges like diabetes, obesity, or a previous diagnosis of a serious disease. However, there are also non-health reasons for being denied life insurance, including risky hobbies and behaviours, a history of DUIs or speeding tickets, a criminal record, or a history of substance abuse.

If you are denied life insurance, you can take steps to improve your chances of being accepted in the future, such as working with a financial professional, applying with a different insurer, or trying again later once you have made improvements to your health, finances, or driving record.

Medical exam

A life insurance medical exam is a common part of the application process. The exam is used to assess the applicant's health and determine their insurability. It typically takes 15 to 45 minutes and is conducted by a paramedical professional. The exam consists of two parts: a questionnaire and a basic physical exam.

The Questionnaire

The questionnaire will cover the applicant's medical and lifestyle information, including:

• Family medical history
• Current and previous doctors' contact information
• Details of current diagnoses
• Recent doctor visits

The Physical Exam

The physical exam will include:

• Recording weight, height, body mass index (BMI), and vitals, including pulse and blood pressure
• Blood and urine samples to test for health issues such as elevated cholesterol or blood sugar levels, and to screen for nicotine and drug use
• Electrocardiogram (EKG) for applicants over 50 who are applying for a high amount of life insurance
• Treadmill stress test and cognitive ability test for older applicants

Preparing for the Exam

There is not much that can be done to significantly improve health in the short term, but certain steps can be taken to ensure the best possible results:

• Eat healthily and avoid high-cholesterol foods, salt, sugar, alcohol, and non-essential over-the-counter medications in the week before the exam
• Avoid strenuous exercise, caffeine, nicotine, and salty or high-fat food on the morning of the exam
• Drink plenty of water and get a good night's sleep
• Wear lightweight and short-sleeve clothing for the exam

Results of the Exam

The results of the medical exam play a significant role in determining the life insurance quote. The underwriting process can take a few weeks, during which the underwriter will consider the applicant's health information and lifestyle to determine their insurance risk class. Once underwriting is completed, the applicant will find out if they have been approved and at what rate.

Frequently asked questions