Life insurance underwriting is getting tougher

December 13, 2021

COVID-19 and the legalization of adult-use cannabis in New York state has affected underwriting greatly. To complicate matters further, some municipalities are considering opting-out of the cannabis adult-use law. These changes are causing insurance underwriters and companies to ask insureds more questions before they issue life insurance policies.

For example, the chart below highlights some of the verbiage found on actual insurance forms:

Has the proposed insured:

Insurance Company A7F. used narcotics, amphetamines, cocaine, LSD, marijuana, or hallucinogenic drugs?
Insurance Company B2a, have you ever used: Cocaine, crack, marijuana, heroin, Ecstasy, PCP, LSD, methamphetamine, any other hallucinogenic drug or controlled substance? 2b amphetamines, barbiturates, sedatives, opiates or methadone or controlled substance except as prescribed by a physician
Insurance Company CIn the last 10 years have you: 8a used cocaine, barbiturates, narcotics, stimulants, hallucinogens, or controlled substances not prescribed by a physician? 8b received treatment, attended a program, or been counseled for alcohol or drug abuse or been advised by a health professional to reduce the use of alcohol?

Question: If your client has used drugs in the past which carrier would be the best choice?

Answer: You need to do some prior agent field underwriting to make the right determination.  This will help your client avoid a negative MIB report and/or a declination if you submit the application to the wrong carrier.

What you can do

Review your carriers’ forms. Look for forms that have all the questions a life insurance company application would ask. Look at the questions that specifically ask about drug and alcohol usage, marijuana and CBD oil usage, tobacco/nicotine usage, hazardous activities and driving history.

Or choose one of the life insurance applications you use to collect the data. If the application doesn’t include questions on marijuana or other drug use, you should add some of your own questions in your field underwriting questions, such as:

Does your client currently drink alcohol? Yes | No

  • Type(s) of alcohol
  • How much is consumed per week?
  • Date of last consumption

Does your client ever drink substantially more than present? Yes | No

  • If yes, when?

Has your client ever consulted a doctor or received treatment because of alcohol use? Yes | No

  • If yes, provide details

Has your client ever used illegal drugs or sought treatment because of drug use? Yes | No

  • If yes, provide details
  • Type of drug(s) used
  • Date of last use

Once you or your client fills this form out completely, then you can call your underwriters to see if they will underwrite your client with a favorable rating. Remember, the more health issues your clients have—or if they state they have used drugs—the higher the rating will be.

Best of luck in your field underwriting!

Gary Slavin, CIC, LUTCF, CLTC

Gary Slavin entered the insurance industry as a claims examiner. His desire to help people in designing insurance coverages prompted him to get his broker’s license and earned his CIC designation in 2002. To continue guiding his clients, Gary received his series 6, 63 and 7 licenses. Reach him at

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