Drug use in Canada is widespread to non-existent depending on what you define as a ‘drug’. Eleven percent of Canada’s population “has a problem with drugs or alcohol” according to a CBC survey, but this does not include people who use drugs recreationally without “a problem.” That number, especially if you count alcohol and cannabis, is much, much higher, and if you count only people with classically defined addictions to the illegal drugs, such as crack cocaine and heroin, the number is much, much lower.
In general, the way insurance companies approach drug issues is based on two key questions: is the potential customer using prescription drugs that are dispensed through the appropriate channels, or is he using drugs outside of those channels, and is therefore statistically vulnerable to certain liability.
For the former, these questions are often discovered in the background checks and medical questionnaires provided by insurance companies before developing or offering a policy. Of course, some drugs have effects on a person’s life expectancy and future quality of life, and others pose certain health risks, even when administered by a health care professional. In these cases, an insurance company will consider the medical problems treated by the drugs and the effects of the drugs themselves when developing a policy, but a policy can usually be provided by most major health insurers.
For those who use illegal drugs, the options are generally more difficult. Usually insurance companies are hesitant to provide policies, many are even wary of offering cheap options to people who smoke cigarettes.
Fortunately, there are still some options available to drug users, especially those who use illegal drugs. Remember that many policies do not cover complications arising from illegal drug use, and failure to disclose such information when requested could constitute insurance fraud, which can be a serious offense with hefty fines and possible jail terms.
In general, illegal drug users have only one option when it comes to life insurance: simplified life insurance policies that don’t require medical questionnaires. This is changing as more and more insurers offer products specifically designed for the “hard to insure” market. Simplified insurance plans often require only simple medical questions that do not include questions about drug use.
There are no medical life insurance policies that vary widely from carrier to carrier, so it’s helpful to research these plans before contacting them to compare potential rates and coverage. You can also ask your insurance broker to conduct an informal preliminary investigation before submitting a formal application. Informal preliminary investigations are non-binding and can give you an idea of whether your application will be approved, rejected or assessed as standard. Keep in mind that insurers may offer plans with first-day coverage or with a two-year waiting period, depending on your situation.
If you’ve taken or used illegal drugs and need life insurance, it’s important to discuss your options with an insurance broker who’s best for you. With the right team behind you, the right policy can be found.