Substance abuse presents underwriting problems. Applicants who have successfully addressed their substance abuse issues with treatment and after-care are generally insurable. Their insurability will depend on:
- The type and length of their substance abuse.
- The degree of secondary physical and mental damage caused by their substance abuse.
- The degree and length of their successful rehabilitation.
A good example of how these three factors impact underwriting can be seen by the following example.
A 55-year-old male applies for life insurance and admits on his application to being treated for alcohol abuse. He denies abusing any other substances. His medical records reveal that he was treated four years ago at a 28-day in-patient program for a thirty-year history of alcoholism. During his treatment he was found to have both long-standing depression and elevated liver function tests. Further liver studies revealed a “fatty liver,” which was proven to be secondary to his alcohol abuse.
Four years later the applicant remains clean and sober. He is being successfully treated for his depression with counseling and Zoloft. His liver enzymes have returned to normal. His lifestyle changes have included regular exercise, better nutrition and continued attendance at AA.
The applicant was issued a policy at standard rates.
Had the applicant not addressed his depression issues or continued to have elevated liver enzymes, the underwriting outcome would have been quite different.
The following screening questions will help producers effectively and quickly screen applicants with a history of substance abuse.
1) Is the client currently using alcohol or drugs?
Underwriting Comment: All substance abuse cases can be divided into two distinct categories: 1) clients who are "clean and sober;" 2) client who are not "clean and sober." If a client with a document history of substance abuse is still using the substance (i.e. alcohol, pain killers, sedatives, cocaine, marijuana, etc.), they are universally uninsurable for individual coverage. Being clear on this question will save the agent and support staff hours and hours of wasted time and effort.
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The hallmark of substance abuse is denial. Clients who are successful in their recovery from substance abuse are generally open about their addiction and the progress they have made in their recovery. The opposite is true of clients who still in denial and defend their right to continue to use the substance. |
2) How and when was the client treated for substance abuse?
Underwriting Comment: There are two kinds of treatment for substance abuse: 1) an organized treatment program (usually in-patient) conducted by medical professionals who are experienced with substance abuse; 2) a "self-directed" program conducted by the client who has made a decision to quit using one or more substances. The greatest clinical and underwriting success is obtained from an organized program. It is important to document when and for what period of time the client was treated for substance abuse.
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The "postpone" period for substance abuse can be between two to five years. It is important to document the exact date the client ended their substance abuse. This will be the "starting" date for underwriting purposes. |
3) Was the client treated for single or multiple substances?
Underwriting Comment: Substance abuse can be a singular or multiple substances problem. Older clients tend to have singular addiction patterns (i.e. alcohol only). Younger clients tend to have multiple addiction patterns (i.e. cocaine, alcohol, sedatives). Underwriting outcome is dramatically different for singular versus multiple substances abuse. Being very clear on this issue will prevent unpleasant underwriting surprises after the case is submitted formally to a carrier (i.e. the underwriter discovers the client was abusing more than one substance).
4) Has the client participated in any after-care program?
Underwriting Comment: Getting clean and sober is one thing, staying clean and sober is another. The highest success rate for recovery from substance abuse is with those clients who receive after-care. This is generally provided through alcoholics anonymous (AA) or narcotics anonymous (NA). It is important to document both the type and level of participation of the client's after-care (i.e. AA three times a week with a sponsor).
5) What lifestyle changes has the client made that would improve his or her chances of remaining "clean and sober"?
Underwriting Comment: Habits do not exist as singular entities. Habits are really extensive networks of habits that reinforce each other. Successful recovery depends on creating new networks of habits. After-care is one vehicle for creating new networks. Reconnecting with family, friends and church are other vehicles to new networks. It is important to document what steps the client has taken to build new habit networks in his or her recovery.
