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Are Cocaine Users Insurable in Canada?

Lorne Marr

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A 2009 Canadian Alcohol and Drug Use Monitoring Survey shows that crack and cocaine are among the most taken drugs by people over fifteen years of age, second only to marijuana.

Whereas cannabis was used by 10.6% of Canadians during the year of the survey, roughly 1.2% of people had experience with crack and cocaine. An average of 11% of Canadians experienced an illegal drug in the same interval. Among these six drugs are heroin, ecstasy, cocaine, speed, hallucinogens (excl. salvia) or, of course, marijuana. Drug use rate among women (7.6%) is about half that among men (14.7%) and is three times higher among our teenagers (27.3%).

In spite of the fact that the trend is a scaling down in drug taking on the whole, there are a lot of addicts and former users who will look for life insurance at some point.

As you would probably guess, life insurers in Canada do not really treat harsh drug use with much sympathy. In most all instances, ongoing cocaine use, or other forms of recreational drugs, such as heroin or ecstasy, will lead to a rejection. Current drug users may still qualify for simplified issue policies. These policies have no medical tests as a pre-condition and usually do not ask drug related questions.

This is how major Canadian insurance companies treat cocaine, heroin and ecstasy:

  • Ongoing cocaine, heroin or ecstasy use will earn you a direct refusal.
  • Addiction ended more than 4 years ago will almost certainly result in a policy rating if there are no remaining health issues. A policy rating is a penalty on top of the traditional policy charge. It means for the insured that he or she pays an additional premium on his or her coverage because the insurer puts up with larger risk. Policy ratings are customarily in multiples and can be anywhere from 50% to 400% on top of the normal plan price.
  • Prior use ended more than 6 years ago may qualify the client for standard premiums (i. e. without policy rating). Of course, this only works if he or she is in good health and has no lifestyle problems.

We highly recommend approaching an independent insurance advisor who has extensive experience working with insurance companies on insuring current or former drug users. Pre-existing medical conditions may quickly shuffle the cards for both the client and the insurer.

Lorne S. Marr, author, is an insurance specialist and an expert on hard-to-insure clients. Lorne works with over a dozen Canadian insurers, such as London Life Insurance Company or Sun Life Insurance .


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