In terms of life insurance, drug use is deemed as risky behaviour.
With regards to life insurance and drug overdose, three aspects are taken into consideration when determining whether or not a pay out should be made:
- Type of drug
- Honesty about previous drug use
- Accidental or intentional
Lying during the application about your drug habits could not only deem your policy invalid but if the dishonesty is identified prior to your death it constitutes insurance fraud and could result in fines or even jail.
Life insurance and intentional drug overdose
Intentional drug overdoses are often covered by the suicide clause meaning that if the overdose occurs within the first two years of the policy, it's deemed invalid and a pay out will not be issued.
Equally, a pay out can also be denied if the policyholder was dishonest about their drug use during the application process.
Generally, overdoses which occur as a result of illegal substances or unlawfully consuming prescription drugs will be considered intentional drug overdoses.
This is because the insurer can conclude that the policyholder was aware of the possible risks involved.
We recently wrote a comprehensive life insurance for drug users article, which may be of interest if you require more detailed information.
Life insurance and unintentional drug overdose
As opposed to falling under the suicide clause, an unintentional drug overdose generally falls under the contestability clause.
This means that if it occurs during the first two years of the policy, the insurer has the right to investigate.
Dependant on the findings of this investigation, a pay out could be denied if it's deemed the policyholder was dishonest about their drug habits.
Death from lawfully prescribed drugs is more likely to be viewed as unintentional.
Previous drug use and life insurance
It's likely that if you declare previous drug use during the life insurance application, they'll write into your contract that upon your death, autopsy and toxicology reports can be obtained.
It's also possible that you'll be subjected to life insurance drug tests prior to approval.
In almost all cases, use of illegal drugs (with the exception of marijuana) will result in you being denied life insurance.
The use of marijuana is likely to increase the cost of your monthly premiums.
Previous illegal drug use is likely to result in a large amount of questioning to determine the severity of your habit.
Abstinence of drug use for 3 years is likely to result in approval with loaded premiums, whereas an abstinence of 15 years plus is likely to result in approval with standard premiums.
It's unlikely you need to declare the use of illegal drugs if you only experimented a handful of times many years ago.