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Will drinking alcohol affect your life insurance plan?

dateKnowledge Centre Team dateApril 16, 2021 views231 Views
Will drinking alcohol affect your life insurance plan?

Drinking alcohol occasionally will not tend to affect your life insurance policy. However, if you are a regular drinker, then you might face a problem in receiving a life insurance policy. Even if you already have a life insurance plan, there are chances that the insurance company might lower insurance coverage due to your avid drinking habits.

This is mainly because the insurance company feels that consumption of alcohol can have an adverse effect on your health, and you can die a premature death. According to a report by WHO, around 3 million deaths are reported worldwide every year due to harmful consumption of alcohol, and it further becomes difficult for beneficiaries of the policyholder to understand how to claim insurance if the policyholder was an alcoholic.

Can alcoholics get life insurance?

While consuming alcohol in limitation is deemed admissible, extreme drinking can be a matter of serious concern for all insurance providers. This is because drinking in abundance has been associated with adverse health diseases like increased blood pressure, kidney and liver ailments, along with coronary disorders. Apart from this, there are also occurrences where unrestrained alcohol intake can cause mental imbalance and obstinate cravings.

Hence, while assessing your eligibility for a life insurance policy, alcohol intake plays a dominant role in defining your premiums. Apart from this, if you are a regular drinker, your odds of receiving a life insurance policy are extremely low. In case a person started drinking after taking a life insurance policy, then, in this case, the insurance company can conduct your medical examination.

If the alcohol level in the body exceeds the prescribed limit, the company can increase the amount of the premium you are paying for an enhanced risk cover to your loved ones. Therefore, you must always keep a close watch on your alcohol use to ensure that you are not charged a higher premium.

However, if you are one who was previously a regular drinker and now recovering from that habit, then you are eligible to receive a life insurance policy if you take the following steps.

  • A record that you have given up on alcohol and how this cutting down on the consumption has enhanced your physical and mental health.
  • Proof of your improvement backed by a medical practitioner to boost the reliability of your life insurance application.
  • Inform your insurance provider about the rehabilitation program that you are attending and also that you have triumphantly accomplished your rehabilitation course.
  • If you never got arrested for a drunk driving case, then you can also present your driving records to the insurance company.

How do drinking habits affect your life insurance plan?

If a person drinks a limited amount of alcohol only on some special occasions and it does not have any adverse effect on their health, then there is no problem for them to qualify for and receive a life insurance policy. However, if a person drinks excessively and that too on a regular basis, then there are chances that the insurance company might reject your life insurance application. If you already have one, you will be levied a much higher premium than what a non-drinking person of your age pays.

The main reason for this non-consideration is because alcohol tends to reduce the life expectancy of the person consuming it, and the person can even die early, making the insurance company liable to pay the assured amount. Apart from this, if you have any criminal case of Driving Under Influence (DUI), then it can become 100 times more difficult for a person to buy a life insurance policy.

In addition to this, if the insurance company finds out that the policyholder who departed in an accident was under the influence of alcohol and the alcohol level was more than the prescribed ones at the time of the accident, then, in this case, the policy provider is not liable to pay any coverage amount to the family of the policyholder.

What is the accepted alcohol intake by an insurance company standard?

The accepted alcohol intake of a policyholder usually varies from one insurance company to another. While any amount of alcohol is bad for your health, if you have a habit of consuming it, always make sure that you do it in limit and at the level prescribed by the life insurance companies. The Centre for Disease Control and Prevention (CDC) has set a limit on the intake of alcohol consumption, and any intake above it will be considered excessive drinking.

The prescribed level of permissible blood alcohol content in India is 0.03% per 100 ml blood. That means 30mg of alcohol per 100 ml of blood is the accepted standard of alcohol intake. If you drink more than this level, then you will likely be seen at an enhanced level of risk by your insurance company, and your insurance provider will increase your life insurance premium.

Not drinking frequently may not harm the rate of acceptance your life insurance application, excessive drinking can. If you feel like you are suffering from excessive drinking syndrome, then it is advisable that you must consult a healthcare expert who can guide you on how to limit or curb your alcohol intake.

Will a whole life cover best option for people who consume alcohol?

A whole life cover option may be the best way out if you are considering to buy a term insurance plan. This option will offer protection to you till you turn 99! However, the premiums that you have to pay will be on a higher side as alcohol consumption impacts your health. So, if you are a habitual drinker, then you must buy a term plan with whole life cover.

Canara HSBC Oriental Bank of Commerce Life Insurance iSelect Star Term Plan may be the one term plan that you are looking for. It offers spouse cover that means, you can add your spouse to the same policy at discounted rates. Your lifestyle and habits may impact your life expectancy. If something happens to you, your family shouldn’t go through the financial shock without any support. With the right term plan, you can secure the future of your loved ones. And especially, adding your spouse to the same term plan as yours will help them in handling the situation, if you happen to pass away.

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Frequently Asked Questions (FAQs) for Life Insurance

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.

Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.

It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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