Jonathan Goodliffe investigates how alcohol misuse can affect insurance
- Alcohol causes multiple problems, including legal problems, in insurance.
- It is often relevant to what the policy does or does not cover.
- People with alcohol problems are often very risk prone.
- They are more likely to answer questions incorrectly when applying for insurance.
- When they stop drinking they may have difficulty getting the insurance they need.
Life insurance and suicide
Alcohol misuse is a leading risk factor for suicide. Many life insurance policies cover death arising from suicide after the first year of cover. So some people, usually addicted to alcohol or other depressant drugs, often with co-morbid mental health problems, take out a life policy. Their intention is to commit suicide in order to provide for their families.
When, however, people who have taken out life insurance commit suicide a year into their insurance cover, the insurance company will usually seek access to their medical records. Suicide can be a rational choice but that is probably exceptional. So usually the medical records will reveal
