As the number of accidental drug overdoses continues to rise, it should come as no surprise that one of the most common questions we’ll often be asked here at IBUSA is…
“Are accidental drug overdoses covered by life insurance?”
And while this may seem like an easy “yes” or “no” question to answer, the truth is, it’s not.
It’s not because…
The answer to this question will depend on a variety of factors, including:
- What type of insurance policy did the insured purchase?
- What type of drug or medication caused the accidental overdose?
- How soon did the overdose occur from the time that the life insurance policy was purchased?
- And were there any particular exclusions with the life insurance policy that may limit whether or not an insurance company would be liable to pay the insurance policy death benefit.
Which leads us to this articles topic which is how most life insurance companies will treat an accidental overdose death based on the type of life insurance policy (or accidental death policy) that has been purchased.
Questions that will be addressed here in this article will include:
- Will a life insurance policy provide a death benefit for those dying from an accidental overdose?
- When will a life insurance policy not provide a death benefit when an accidental overdose causes the death?
- What are some mitigating factors that will come into play when a life insurance company investigates the accidental overdose death of an insured?
Do insurance companies care about what drug caused the accidental overdose?
- Prescribed vs. Illegal?
- What can I do to ensure that I purchase the right life insurance policy for me?
We should also note that this article will not discuss whether or not someone with a history of drug or alcohol abuse will be able to qualify for life insurance. Answers to these questions and more will be found in our articles that focus exclusively on drug abuse and alcoholism.
Will a life insurance policy provide a death benefit for those dying from an accidental overdose?
Short answer: Yes.
Long answer: It depends.
If the insured qualified for a traditional term or whole life insurance policy where they were required to take a medical exam and/or answer a series of health-related medical questions, and then later died of a drug overdose, the chances are that death would be covered under such a policy.
Assuming of course…
That the insured didn’t lie about any drug (past or present) on their life insurance application which could potentially be used as material misrepresentation and thus void the life insurance contract entirely.
Allow us to provide you with a couple of examples…
Let’s say an individual is approved for a life insurance policy in their mid-30’s. Then ten years later, they suffer from a car injury, become addicted to prescribed pain medications, and then horrifically accidentally take too many one evening and die from an accidental overdose. In this situation, the life insurance policy would payout in full.
Let’s now look at an example whereby the applicant decides to apply for a traditional life insurance policy in their early 40’s. They were just in a car accident and realized how short life could be and now want to make sure their family would be protected if they die prematurely. When asked about their accident and pain medication prescriptions, the applicant describes his or her injury but clearly states that they are no longer in pain and are no longer taking any pain medications. Which in fact, is not true, they simply aren’t being prescribed any pain medications any longer.
In this example, the insured dies from an accidental overdose six months after being approved of coverage due to taking illegally obtained pain medications. In this situation, the insurance company would have the right and be justified in saying had they known their insured was using these drugs at the time of the application they would not have approved them for coverage and would have a legitimate claim to deny the insureds death benefit. Whether or not they would choose to make this claim would be up to them. However, chances are they would try.
But it’s important to note that in these examples…
We’re only talking about how a traditional term or whole life insurance policy would look at such a death. In cases where an insured has purchased a Guaranteed Issue Life Insurance Policy or an Accidental Death Policy, things are a bit clearer.
Guaranteed Issue Life Insurance Policies.
Guaranteed Issue life insurance policies or final expense life insurance policies are life insurance policies that are issued to an insured without requiring them to take a medical exam or answer any health-related questions.
This means that one’s drug use or potential drug use in the future won’t play any role in whether one is insured or not. Instead, the only thing that’s going to matter is whether or not an insured meets the required age restrictions and lives in a state where these “types” of life insurance policies are offered.
The applicant will be covered, and should they die from an accidental overdose, their death will be covered by the insurance policy provided they have owned the policy below the graded death benefit period of time, which would provide full coverage.
If the insured’s death falls with the first 2 or 3 years of owning their policy (depending on the carrier), how the accidental overdose took place may become a factor depending upon whether the drug that caused the overdose was prescribed or was illicitly obtained.
Accidental Death Policies
Lastly, we wanted to take a moment and discuss how accidental death policies will factor into this discussion because unlike true life insurance policies; accidental death policies don’t qualify as life insurance. Instead, they are accident insurance, which is why they won’t provide a death benefit to a policyholder if they die from NATURAL CAUSES.
Accidental death policies also tend to have rather restrictive language placed into them limited their coverage if one does as the result of illegal activity, which one would assume would include the use of non-prescribed medications.
For this reason, we generally try to avoid recommending these types of products for those trying to provide coverage against an accidental overdose.
Suicide and Accidental Overdose.
We should also note that most traditional life insurance policies and guaranteed issue life insurance policies will provide coverage to an insured beneficiary if the insured chooses to take their own life to provide that they have owned their life insurance policy for a certain number of years (2-3 in most cases). The argument here is that truly mentally ill people would have the foresight to purchase a life insurance policy for this purpose and then wait for 2 to 3 years to complete their plan. For more information about how life insurance companies view applicants who have attempted suicide in the past, please visit our article that focuses on Suicide Attempts and Life Insurance.
So, now that we’ve gone over a lot of information let’s summarize a few things starting with…
When will a life insurance policy not provide a death benefit when the death is caused by an accidental overdose?
Insurance companies are generally not going to provide a death benefit to an insured beneficiary when:
The insured has lied about their drug use on an application and dies during the first two years when most life insurance policies remain in a preliminary contestability phase.
Upon the death of an insured due to an accidental drug overdose, the insurance company may request additional medical records that they didn’t originally order during the initial life insurance application because they had no reason to doubt the applicant’s denial of any drug use. In cases like these where it is found that the insured has battled with drug addiction for years but failed to disclose this information when applying, the insurance company would have a legitimate claim to deny coverage.
The insured intentionally used drugs to end their life.
If it turns out that the insured intentionally killed themselves by overdosing on drugs or medications (as evident from a note or other evidence), the insurance company may be entitled to invoke the 2-year suicide clause found in many life insurance policies reducing or eliminating their responsibilities.
Most common drugs that can cause an accidental drug overdose include:
- Prescription pain relievers
In addition to any number of drug combinations including drugs and alcohol.
The insured accidental overdose was somehow the result of some type of illegal activity.
Suppose the insured accidental overdose was somehow linked to some type of illegal activity such as smuggling, selling, or avoiding being arrested (ingesting evidence). In that case, some insurance policies may have a clause written in them that would limit their exposure to such a death.
We should also note that these are just a few ways an insurance company can potentially deny a claim based on an accidental overdose death. However, it’s fair to say that most cases will involve so nefarious situations involving illegal drug use vs. prescribed medications from a doctor.
Along these lines, let’s not take a look at…
What are some mitigating factors that will come into play when a life insurance company investigates the accidental overdose death of an insured?
Factors that will come into play when determining whether or not a life insurance company will pay the death benefit to an insured if they die from an accidental death overdose will include:
- What type of life insurance policy did they own? Did the application process ask them about any potential drug use?
- Did they answer truthfully and honestly if asked on the life insurance application about any drug use or prescription medication used?
How long had the insured owned the life insurance policy before their accidental overdose death?
- Had the contestability period ended (in the case of a traditional life insurance policy)? Had the graded death benefit period ended (in the case of a guaranteed issue life insurance policy)?
- What type of drug/medication caused the overdose? Was it prescribed? Or was it illegally obtained?
- Was the overdose an accident or was it a planned suicide?
Do insurance companies care about what drug caused the accidental overdose? Prescribed vs. Illegal?
As a general rule of thumb, most insurance companies are going to “care” what kind of drug caused an accidental drug overdose because it helps set the tone of what kind of other questions should be asked. Beyond that, it just comes down to the type of life insurance policy that was purchased, when it was purchased, and any particular language within the policy that may limit an insurance company’s exposure to risk. Typically, most life insurance companies are more worried about illegal drug use than drug use that is prescribed and monitored by a licensed physician.
What can I do to ensure that I purchase the right life insurance policy for me?
Now chances are, if you’re reading this article, you’ve either just suffered a loss of a loved one and are wondering if an existing policy will cover it or you or your family experienced a close call and are wondering what would have happened if you’re loved one passed away.
In either case…
When it comes to ensuring you have the right life insurance policy in place to protect your family, the advice remains the same, which is you will want to seek out a professional that is well educated on the topic of accidental drug overdoses and understands how different life insurance companies will have different rules and regulations on how they will provide coverage for them.
This coupled with…
A well-informed agent that has access to dozens of different life insurance companies for you to choose from. This way, when the time comes for you to make a decision, you won’t have to just pick and choose between one or two options. Instead, you’ll be able to review dozens of different options, increasing your chance of success.
So, what are you waiting for? Give us a call today, and let us show you what we can do for you!