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Impact of Alcohol on Health Insurance Premiums

If your insurance provider learns you regularly consume alcohol, the insurer might deny or reject your claim. This is because greater alcohol use may result in health risks that your insurer may not be willing to pay for.

  • 17 Apr 2023
  • min read
  • 2314 views

Over time, alcohol has become more prevalent in people's lives, especially among younger generations. Consuming it in moderation is not an issue, but if it becomes a habit, that is cause for concern. It can lead to various illnesses, including liver cirrhosis and cardiac disease. Many people today are unsure of insurance for alcohol consumers and the benefits of a policy that provides coverage to such people. Also, many believe their insurance providers will reject their claims because of their consumption of alcohol.

If your insurance provider learns you regularly consume alcohol, the insurer might deny or reject your claim. This is because greater alcohol use may result in health risks that your insurer may not be willing to pay for. The catch is that your insurance provider might ask you to shell out a higher premium because your chance of contracting diseases may increase. As a result, drinking alcohol affects your insurance cost in many ways.

Are Alcohol Consumers Eligible to Buy Health Insurance?

A person can apply for a health insurance plan if he/she infrequently drinks or consumes alcohol moderately without adverse effects on the person’s health. Therefore, those who consume alcohol can buy health insurance.

  • The insurer might request an examination when someone starts drinking after obtaining health insurance. To avoid paying a higher premium, you must always drink alcohol cautiously.
  • You must inform your insurer even if the insurance provider does not evaluate you on this count. If you hide the fact that you consume alcohol regularly and subsequently experience health issues, the insurer might reject your health insurance claim.
  • Insurance companies can request the medical case file to analyse the alcohol consumption problem of a policyholder. If that happens, you could be obligated to pay for the therapy. Many people hide this to avail of a policy at a lower premium. However, if the insurer finds out, the monetary consequences of a denied claim are much worse.
  • Significant health problems brought on by a high level of alcohol consumption result in a higher premium as it increases the insurance company's liability to provide coverage. If you drink, choose “alcoholic” when getting health insurance estimates. Try ticking off non-alcoholic beverages to see the difference in the premium.

The premium will also depend on you, and your drinking practises if you are the oldest family member considering a family floater health insurance plan.

Is It Important to Declare if You Are an Alcohol Consumer to an Insurance Company?

It's important to understand that your drinking practices may affect the perks of any health insurance plans you buy or already have. So, this may not severely impact those who drink alcohol infrequently; it might significantly affect extreme drinkers and could even lead to insurers denying or rejecting their claims.

When buying a life insurance policy, you must fill out a declaration form so that the insurer is aware of any existing medical conditions. Furthermore, one must reveal whether or not they consume alcohol because failing to do so could result in the life insurance policy being affected by pre-existing medical problems like cirrhosis of the liver.

Drinking too much alcohol can cause several illnesses, such as liver disease, cancer, stroke, diabetes, and pancreatitis, which generally shorten a person’s expected lifespan. The insurance companies see it as a risk and request an advance declaration from the prospective policyholder. Your insurance provider may raise your premium if your blood alcohol level exceeds the permissible limit.

Your risk of denied claims increases manifold if you withhold facts when buying a health insurance policy. As a result, it is wise to be completely truthful about your health status when applying for an insurance policy.

Why Is Insurance Premium High for Alcohol Consumers?

Moderate alcohol consumption is acceptable, but excessive drinking may raise red flags for prospective insurers.

  • Excessive alcohol consumption may lead to illnesses like high blood pressure and liver, kidney, and coronary diseases. In addition, it may cause problems with a person’s mental health and issues related to substance abuse. Therefore, your alcohol intake significantly impacts your premiums when determining your suitability for the finest term insurance policies.
  • Your medical documents may also show that your routine alcohol consumption is above a threshold. Additionally, becoming a higher risk for prospective insurers will directly raise the cost of your insurance premium.
  • You will probably be eligible for a standard rate if your binge drinking happened in the past and you have refrained for 5-7 years, for instance. On the other hand, if you've been sober for one to five years, you probably count on rated insurance, which has higher rates. But the insurer will limit the scope of coverage. However, your application has a high chance of being rejected if you sought therapy, relapsed, or remained sober for less than a year.
  • Purchasing life insurance coverage may be extremely harder if you have a criminal record for driving while intoxicated (DUI).

Suppose the insurance provider determines that the policyholder died in an accident due to intoxication and the person's blood alcohol level was higher than the legal limit. In that case, the insurer has no obligation to provide coverage to the policyholder's family. You must be mindful of these factors when you think in terms of insurance for alcoholics. You must be aware of these factors when you think in terms of insurance for alcoholics.

Importance of Buying Health Insurance for Alcoholics

While it might be challenging for an alcoholic to obtain health insurance, it's not unattainable. An insurance company might issue a policy, but the payment might be higher; a medical test can reveal whether an individual drinks heavily or moderately. A person may be eligible for a basic health insurance plan if he/she has only been a moderate drinker for a brief period. Below is a list of factors that show the significance of purchasing health insurance for alcoholics.

  • Hospitalisation as an inpatient: Medical expenses accrued while receiving treatment in the hospital will be covered. However, the co-pay provision or clause may require the policyholder to foot a portion of the bill.
  • Co-payment and deductibles: Health insurance providers may have a co-payment provision requiring the insured to pay a portion of the expenses incurred. In most instances, the policyholder can choose the percentage of the co-payment. One of the elements affecting the cost of health insurance is the co-payment proportion selected. Similarly, a person who chooses a high deductible can get the benefit of a relatively cheap premium.
  • Cashless facility: If a person decides to get treatment in a network hospital, he/she can get the advantage of cashless transactions. The insurer will pay for the expenses incurred at the point of discharge.
  • Lifetime renewability: This is a standard feature of health insurance plans. The policyholder must renew the insurance plan on time to continue receiving the benefits.

Also read:

How You Can Lower Health Insurance Renewal Premium by Quitting Alcohol?

You could renew your policy at a lower premium if you were a heavy drinker earlier but have since stopped by taking the following steps:

  • Send a statement detailing your choice to give up drinking and your improved physical and emotional well-being.
  • The legitimacy of your request for health insurance will get strengthened by evidence of your success backed up by a doctor.
  • Notify your insurance provider of the rehab program you've signed up for and that you've finished it effectively.
  • If you did not get arrested for intoxicated driving, you could also present the insurance company with your driving record.

Going to treatment or counselling, reducing your alcohol intake and becoming sober can also help you in getting a lower premium.

When determining your life insurance premiums, insurers will also consider your general health and lifestyle decisions and your history of alcohol consumption. As a result, most insurers will ask you to complete a form about your alcohol consumption to determine how much you drink. Typically, this form will pose questions about the following:

  • Routines of use (frequency and the consumed amount)
  • Changes in behaviour and the reasons behind them
  • If any treatment is necessary 
  • Relapse history, if any

In addition to purchasing insurance coverage, if you presently struggle with an addiction to alcohol, you should seek treatment. Initiatives like Alcoholics Anonymous can offer you the support needed to get well. Health insurance companies will also lower your premium if you get treatment for your alcoholism rather than ignoring it.

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