Life Insurance Could Be Denied to Those With Heavy Drinking Habits

21.04.2006 Life insurance could be jeopardised if holders don’t give honest accounts of how much alcohol they drink. Many insurance companies follow National Health Service (NHS) Guidelines, when it comes to how much alcohol consumption they believe is acceptable. According to the NHS this is a maximum of 21 units per week for men and 14 for women.


The Association of British Insurers (ABI) encourages people to give accurate information on an insurance application forms and a spokesman from the ABI warned: “If there was a failure to disclose hospital treatment for a salient condition that may invalidate an insurance policy.”

A recent case at the High Court showed that life insurance policies could be refused if information supplied by policy holders was incorrect or incomplete. And even if the cause of death was unrelated to the inaccurate information, the fact that the information was inaccurate would be grounds enough for rejecting the claim.

Mrs Mundi, a widow from London, challenged Lincoln insurance for refusing to pay a £100,550 life insurance claim when her husband died of a heart condition. The challenge was overruled because her husband had not informed the insurance company of incidences when he had had heavy drinking sessions. One occasion had led to medical treatment being required at a hospital, the records of which were discovered by the insurance company. Although the heart condition which caused his death was unrelated to drinking, the policy was rendered invalid because of the drinking binges which hadn’t been reported to the company.

Mr Justice Lindsay agreed that Lincoln Assurance was “entitled to void the policy”. But the insurance company returned the premiums paid into the policy which amounted to £9577.
The ruling could give extra scope to companies to refuse other claims. This is why people should be accurate with insurance companies to protect them or their family from the unfortunate event that a claim needs to be made and then is refused.