The COVID-19 pandemic has unfortunately had a major impact on the economy, as well as our mental health in the UK. This in turn has led to many people increasing their alcohol consumption.
The Royal College of Psychiatrists has estimated that in June 2020, more than 8.4m people in England were drinking at significantly higher-risk levels, up from 4.8m just four months earlier.
A separate study by Cambridge University claims that one in three of us increased our alcohol consumption during the first national lockdown. What’s more, those with children reported a greater increase, thought in part to be as a result of the increased stresses of homeschooling and economic pressures.
There will be a variety of reasons for this increased intake, to briefly forget about business worries, the perceived relaxation benefits to take the edge off of the challenges of lockdown or to appear more sociable on the family Zoom call.
What this devastating global pandemic has taught us is just how precious and fragile life can be.
Whilst the majority of UK industries are suffering, the life insurance and income protection sector is thriving as people seek to protect their loved one’s financial future if they are no longer around.
The proceeds from life insurance can be used as the beneficiaries wish but are commonly used to repay the mortgage, cover family living costs, provide inheritance and meet funeral costs.
But how does our alcohol consumption affect our life insurance?
The cost of life insurance
The cost of your life insurance is calculated based on the level of risk you pose to the insurer. The greater the perceived risk of a pay-out, the more your monthly premium.
During the application process, an insurer will ask a series of questions to establish the level of risk you pose, such as your medical history, smoking status, and yes, your alcohol consumption.
Age is unsurprisingly the most influential factor with regards to the cost of your cover. Therefore, if you are in your 20s and a heavy social drinker, the increase in premium cost will not be as significant as a heavy drinker in their 50s. (So, cut down sooner, rather than later).
You may have some life cover through your business/employer, such as a death in benefit – which you can offset against the level of personal cover you require. However, this benefit will not move with you if you change businesses.
Different insurers have different alcohol thresholds
While you will probably be considered to be consuming an excessive amount of alcohol if you have over 15 drinks per week, insurers do not tend to request that you undergo a medical unless your weekly consumption exceeds 40 units.
However, different insurers employ different alcohol thresholds and underwriting processes, therefore it pays to compare multiple quotes from different providers.
You can use a life insurance broker such as Reassured, free of charge to compare prices. Reassured have a dedicated impaired risk team who are able to help applicants who may have been declined elsewhere as a result of their drinking.
Life insurance for ex-alcohol abusers
Well done, you are happy and healthy and no longer physically dependant on alcohol. You are also better off financially with the money you have saved from buying booze.
However, you may wonder whether your previous addiction will impact your life insurance. The answer is it depends.
Firstly, it is far easier to arrange life insurance if you are no longer misusing alcohol, so that is positive. Although, a period of sobriety is usually required before your life insurance application will be accepted. This period of time can vary between different insurers, ranging from 1 year-6 year.
Policies are also likely to include an exclusion if alcohol abuse is confirmed as the cause of death. For example, if you pass away as a result of alcohol poisoning or an alcohol-related incident, your family is likely to be denied a pay-out.
Life insurance takes into account your circumstances at the point of application. So, if you develop an alcohol dependency at a later date this will not impact a successful claim.
Non-disclosure (always be open and honest)
If you currently misuse alcohol or had have issues in the past, you may be tempted to withhold or even lie about your drinking during the application in order of securing a cheaper premium. This is known within insurance as non-disclosure.
If after your passing it is discovered that you were not open and honest on your application it could invalidate your policy, rendering your investment a waste of money. An insurer can even request access to your medical records if they suspect non-disclosure.
Another great reason to cut down or stop drinking alcohol
In summary, even if you are or were a heavy drinker it is still possible to secure life insurance to protect your loved one’s financial future during this very challenging time.
However, insurers will factor in your alcohol consumption when calculating the cost of your monthly premiums. If you are an extremely heavy drink you may be declined outright until you have abstained for a period of time. https://thisnakedmind.com/ can help you achieve this goal.
As a result, this is yet another fantastic reason to cut down or stop drinking altogether.
Why not seize the moment and make today the day you decide to make a change and protect those most important to us?