Why Do Life Insurance Companies Care About DUIs? It’s very simple. If you play with fire too long, you will get burned. We are not here to lecture, but driving while intoxicated is likely to lead to death, something the carrier must pay for via death benefit to your beneficiaries.
Insurance companies hate risks. If you pose a higher risk, they will say “pay more” or “sorry, we are not interested.” According to the CDC, in 2015, 10,265 people died in alcohol-impaired driving crashes, accounting for nearly one-third (29%) of all traffic-related deaths in the United States.
DUIs aren’t the only thing that will get you rated up or declined altogether. Reckless driving, license suspensions or more than three moving violations in the last three years will get you similar results. But make sure you don’t hide your DUI or DWI on the application or from your agent. The company will run an MVR report where they can find everything regarding your driving history, so hiding it makes no sense, and you may risk the company rescinding the policy for misrepresentation or lying on the application.
What the Underwriter Will Ask
You must be honest about your DUI with your insurance broker and on your life insurance application. Any lies on an application form are considered fraud and can result in the insurance company rescinding the policy, which means they’ll refuse payment to your beneficiaries. The insurance company will look at the following:
- Your current age
- Any other health conditions
- How many DUIs you have had
- Time of the last occurrence
- Any history of alcohol abuse
- Steps taken toward recovery
- Driver’s license suspension
- Any criminal record
What the Underwriter Will Ask
You must be honest about your DUI with your insurance broker and on your life insurance application. Any lies on an application form are considered fraud and can result in the insurance company rescinding the policy, which means they’ll refuse payment to your beneficiaries. The insurance company will look at the following:
- Your current age
- Any other health conditions
- How many DUIs you have had
- Time of the last occurrence
- Any history of alcohol abuse
- Steps taken toward recovery
- Driver’s license suspension
- Any criminal record
How Long Do I Need to Wait to Get the Best Rate?
I made a sample underwriting guidelines table with a few of the life insurance companies on the market. This table is only for DUI or DWI, but keep in mind that reckless driving, suspension, and moving violations are very similar in nature to DUI, although companies do allow two or three occurrences before they are considered as bad as a DUI. Use this table as a general guideline; it is not exact. For example, with AIG, to qualify for the preferred plus best rate, you must not have had a DUI in the past seven years, but, to get a preferred rate, it’s only six years, and, for the standard, it’s only three.
| Carrier | Preferred Plus | Preferred | Standard Plus | Standard |
|---|---|---|---|---|
| AIG | 7 yrs | 6 yrs | 5 yrs | 3 yrs |
| American National | 5 yrs | 5 yrs | 5 yrs | N/A |
| Assurity | 7 yrs | 5 yrs | N/A | N/A |
| Banner Life | 3 yrs | 3 yrs | 3 yrs | 3 yrs |
| Foresters | 5 yrs | 5 yrs | 5 yrs | N/A |
| John Hancock | 10 yrs | 5 yrs | N/A | N/A |
| Lincoln Financial | 5 yrs | 5 yrs | N/A | N/A |
| MetLife | 5 yrs | 5 yrs | 5 yrs | N/A |
| Mutual of Omaha | 5 yrs | 5 yrs | 5 yrs | N/A |
| Nationwide | 5 yrs | 5 yrs | N/A | N/A |
| North American | 5 yrs | 5 yrs | N/A | N/A |
| Principle | 5 yrs | 5 yrs | N/A | N/A |
| Protective | 5 yrs | 5 yrs | N/A | N/A |
| Prudential | 5 yrs | 5 yrs | Based on driving history | Based on driving history |
| SBLI | 7 yrs | 5 yrs | 5 yrs | 2 yrs |
| Transamerica | 5 yrs | 5 yrs | 5 yrs | N/A |
How Driving While Intoxicated Affects Your Life Insurance Rates
Every two minutes a person is involved in an alcohol-related crash. In recent years, approximately 30% of motor vehicle fatalities can be attributed to alcohol and recreational drug use. Life insurance companies are all about statistics.
Life insurance companies base their policies’ cost on mortality risk. Considering the statistics above, applicants with DUIs and DWIs are high-risk to insure. To balance out the risk of insuring individuals with a history of DUI/DWIs, the insurance companies require higher than average life insurance premiums.
If you’re applying for life insurance with a history of DUI/DWIs, the following are the most important factors affecting your costs:
- Your current age and your age at the time of violation(s),
- The number of violations you have had,
- How much time has passed since the most recent violation.
Typically,
- The younger you were when you were convicted of the DUI, the higher your premiums.
- The more DUIs in your history, the higher your premiums.
- If you were required to have an ignition safety device installed, the higher your premiums.
- If your medical exam results show alcohol overuse, the higher your premiums.
- If your license is currently revoked or suspended due to driving violations, the higher your premiums.
If your violation is within five years of applying for life insurance, it’s not uncommon for the life insurance company to approve you but require a flat extra. A flat extra is a specific added dollar amount per $1000 of insurance coverage. The flat extra can be permanent or only required for a certain number of years. With driving violations, typically the flat extra is temporary.
As you can imagine a DUI or DWI absolutely affects your insurance rates….and much, much more.
When you ask how a DUI affects your life, we are talking about potential time in jail, increased insurance rates across the board and suspension of your driving privileges altogether!
DUIs / DWIs are serious business ladies and gentlemen and life insurance companies see it that way too.
Let’s face it if you are drinking and driving or have done in the past, you’re seen as a higher risk.
Life insurance companies are in the business of making money so anything that indicates that your mortality will be cut short is a red flag.
You can’t blame ’em.
Could I Be Denied Life Insurance Altogether?
When you consider how a DUI affects your life it’s important to remember that there can be some unpleasant consequences.
The question – how much does a DUI increase insurance – may be the least of your problems.
Reality Check: You might be denied life insurance completely. It really depends on your personal circumstances.
Frankly, life insurers do NOT want to see a DUI / DWI on your record in the past 12 months. If they do, most will refuse to cover you.
Oh, come on now! Nothing happened and everyone got home safe and sound.
Well, you may have just been lucky and insurers don’t factor in luck when they underwrite people. Drinking and driving is a deadly game.
Will I Be Able To Get An Affordable Life Insurance Rate With A DUI?
Each life insurance company approaches DUIs and DWIs differently!
For the most part, you won’t get the best possible rates offered until you have been DUI free for more than 5 years.
This isn’t true across the board of course.
This penalty can be imposed anywhere from 5 – 10 years after the date of your DUI. It really depends on the company.
But more often than not you will have to wait at least 5 years to qualify for the best health rating!
So if you are wondering, how much does a DUI increase insurance, there is a light at the end of the tunnel!
If you’ve been DUI free for more than 5 years, in the eyes of most life insurance companies, all signs point to you being a person who doesn’t abuse alcohol while you’re driving.
Whew!
An increase in your premiums can really impact your wallet if you are in good physical health.
Over a 30 year term, you will lose thousands more than you would have had you not been arrested for drinking and driving.
Here is a list of some of the carriers that implement the 5-year policy:
- American General
- Banner Life
- ING
- West Coast Life
- MetLife
I Had a DUI Less Than 2 Years Ago, Can I Get Coverage?
If you really need life insurance and your DUI was less than 2 years ago, I have some good news.
Prudential has been known to provide coverage.
If your DUI was 2-5 years ago, your best bet for life insurance is Banner Life
They will give you a standard or standard plus rating (as long as you physically qualify that is!) if your DUI was more than 2 years ago!
I highly suggest speaking to an independent agent at Huntley Wealth. We can assess your specific case to decide which carrier will give you the best rating and the lowest possible premiums.
There is hope. After 5 years of good behavior and minimal drinking, you should be able to qualify for the best rates with most insurers.
However there are some exceptions! Always get advice from an independent agent before you sign on the dotted line.
Some Carriers will Make You Wait Up to 10 Years Post DUI to Get the Best Rates.
NOTE: There are a handful of carriers who won’t allow a DUI in the last 10 years, such as Minnesota Life and Lincoln Benefit. Stay away from these two insurers if your DUI was between 5-10 years ago. AXA is another super stringent carrier when it comes to this issue!
How Life Insurance Companies Rate Multiple DUI’s – Real Life Example
I got a call from a 33 year old man looking for $500,000 in term life insurance coverage last week.
He’s healthy as an ox, a non smoker, no hazardous activities, good build, no history of family disease or deaths due to cancer or heart problems.
So he’s easy to insure, right? Nope. He’s got one BIG problem.
Every life insurance application these days asks if your driver’s license has been suspended or revoked in the past 5 years, or if you’ve been charged with driving under the influence (DUI) or DWI.
If you answer yes, your ability to get insured with most carriers vanishes.
This man had his license suspended after three DUI’s!
You can see how life insurance carriers would tread lightly here since someone’s chance of dying in a car wreck is higher if they drink and drive.
That’s why a lot of insurance companies decline you with a recent DUI.
Thankfully, there are a few carriers who will consider your situation if you’ve had a DUI inside of 5 years, even if your license has been revoked.
The problem with this prospect is that he has a record of drinking and driving and racked up an incredible 3 DUI’s over the past 11 years!
My client’s story has a silver lining though. The DUIs were brought on by alcoholism and hasn’t had a drop to drink in the past 5 years.
In addition, he’s been attending AA meetings for the past 5 months.
Hmmm, sounds fishy – is he falling off the wagon?
Nope, he wants to document his sobriety so he can get his driver’s license back in a few years.
So I guess this guy is out of luck right?
Nope!
We managed to get him an offer, albeit with some pretty steep premiums despite his history of DUIs.
My advice is, don’t assume you will be declined. More often than not Huntley Wealth finds a way to get even the toughest cases approved.
To get him insured, I shopped out the case to lots of underwriters and got the following feedback:
- First of all, attending AA meetings just for appearance sake doesn’t bode well for him in the eyes of insurance underwriters. They only see that he’s still in treatment for alcoholism. One company’s underwriter told me they wouldn’t even consider him until two years after he completes his AA program.
- Secondly, a lot of carriers will not offer insurance to him because he doesn’t have a valid driver’s license.
- Finally, insurers looked favorably upon his complete cessation of drinking alcoholic beverages.
AND We’ve Got an Offer!
One carrier agreed to offer a standard, table D since he abstained for such a long period of time. The catch was his abstinence had been documented in his medical records.
If my client can provide this information, then we have a case.
If you want something to be noted in your medical records, I suggest booking an annual physical. During your appointment, tell your doctor that you quit drinking and you’d like it added to your file.
You might be asking “Can’t he avoid all this by applying to a life insurance carrier that doesn’t ask about the DUI or license suspension/revocation on the application?”.
He already tried that and it doesn’t work. Even if you are lucky enough to find a simplified application that doesn’t ask about that specifically, the insurance company will still pull an MVR (motor vehicle report) and see your license has been suspended. There’s no getting around it I’m afraid!
Where to Start if You Have a DUI
We cannot stress enough the importance of life insurance.
Choosing the right product at the most affordable possible price is best achieved through using the services of an independent life insurance agent, such as those at Huntley Wealth.
Independent agents have access to multiple companies. We know which insurers offer the best rates when it comes to obtaining life insurance for those that have had DUI’s.
Call us today at 512-963-5000 if you think you need life insurance because we can help!*While we make every effort to keep our site updated, please be aware that “timely” information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.
