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If you are planning to buy a life insurance policy or already have one, then it is important to understand that your drinking pattern may have a bearing on the coverage of the policy. While occasional drinkers may not have serious implications but in the case of extreme drinkers, it can lead to a rejection of claims.
At the time of buying a life insurance policy, insurers ask to fill a proposal form in order to declare any pre-existing illness. There one also needs to mention if one consumes alcohol as non-disclosure of pre-existing medical ailments such as alcoholic liver disease can have an impact on the life insurance policy.
Why is alcohol a risk for insurance companies?
Consuming alcohol within the admissible limit is fine with insurers, but extreme drinking can create problems. This is because according to statistics alcohol addiction tends to reduce life expectancy as there are many serious illnesses that are related to alcoholism such as liver disease, stroke, cancer, diabetes, pancreatitis, among others. The insurance companies consider it as a risk and therefore needs a declaration from the customer in advance. If the alcohol level is above the prescribed limit then the insurer can charge you a higher premium.
The alcohol permissible limit may vary from insurer to insurer. The Centre for Disease Control and Prevention (CDC) has set the prescribed level of permissible blood alcohol content in India. It allows 30mg of alcohol per 100 ml of blood as the accepted standard of alcohol consumption.
When applying for the policy, the insurance company assess the risk and determine the premiums based on your health status. Someone with no health issues is charged to pay less in premiums than someone with a medical with a history of alcohol abuse.
What if you lie while buying the policy?
If you lie at the time of taking the policy, it can lead to rejection of the claim later. It is therefore always advisable to declare your health status honestly without hiding any material facts while taking out the policy. Though the premium can rise but will have mental peace that your family will receive the claim amount you intended them to receive.