It’s widely understood that a history of engaging in dangerous vices — such as smoking and drug abuse — can lead to an increase in life insurance premiums. But what about more socially acceptable habits, like drinking? Do drinkers pay more in insurance than non-drinkers? And is there anything you can do about your alcohol consumption to make sure your premiums stay low?
Let’s take a look into how life insurance companies consider your relationship with your favorite drinks.
Understanding the basics: life insurance
Life insurance companies are in the business of risk management. They will have to pay you if certain conditions are met, and the more unlikely those conditions are to happen, the less of a risk they are taking on. This will allow the insurance companies to offer you bigger payouts, or charge you fewer premiums.
There are two ways in which you can keep your premiums low in any type of insurance. The first is to simply reduce the payout the policy will give you. If your risk factor is 10 and your payout is 25 thousand, your premiums will be cheaper than those of someone who has a risk factor of 5 and a payout of 250 thousand.
The second way is to reduce the risk you pose to the insurance company. Since we are talking about life insurance, you can lower your premiums by reducing the likelihood that you’ll die in the near future. Which begs the question: do insurance companies see alcohol consumption as a risk factor?
Alcohol and insurance
The answer to that question is yes, but only under certain circumstances. When applying to get a life insurance policy, you’ll be asked to fill all sorts of forms and provide many types of medical information. That process is meant to give the company the data they need in order to assess the risk you pose to the company. If you lie in any of this documentation, the company might be able to deny you the benefits of your policy in the future.
Questions about your alcohol consumption are often part of this questionnaire, but insurance companies are not worried about all types of drinking. If all you do is drink once in a while with your friends, that will not influence your premiums.
However, having a history of heavy drinking or alcoholism can affect your premiums. And if your medical records show that you have already consumed enough alcohol to start damaging your body — such as causing liver damages and other consequences — that will definitely impact the price of your premiums.
That’s not to say that alcoholics are doomed forever. There are life insurance policies made specifically for people who had a drinking problem in the past and are now recovered — these policies allow former drinkers to pay less as long as they can avoid relapsing.
It’s best, however, to keep yourself healthy by drinking in moderation and maintaining a healthy lifestyle. That will help keep your premiums relatively low, even as you grow older. You can find out more about life insurance by visiting this site: https://www.insurancehero.org.uk/.