Denied Permanent Policy

[nayse]

I was denied coverage for a permanent policy (something my financial advisor told me to do) because I tested positive for cocaine. What can I do? Can I just take another drug test? I’m not a habitual user it was just a random after a holiday weekend so I know I’ll pass another test with flying colors. Is this usually an option or do I need to try and switch providers?

 

[structure]

@nayse You are now in the system as being declined for Cocaine. You would have to show abstinence for several years before you would be accepted for any type of underwritten policy. You can’t just ask for another test. Now anytime you complete an application, you have to answer yes to the drug question. Because if you answer No and they pull your records and they see the cocaine use in the past, now you aren’t being truthful. Which is a whole other type of decline.

 

[jeshurun1111]

@structure B-b-but I didn't do coke this weekend!

 

[texco]

@nayse So did you know you were going to take a drug test and did the cocaine anyway or did you take the cocaine first and then agree to a drug test?

 

[levnishbar]

@nayse It'll show up on your MIB if you apply somewhere else. How much death benefit are you looking for? There are guaranteed issue policies.

 

[aladinair]

@nayse 5 year postpone; it will show up on your MIB. Guaranteed issue is only option.

 

[dinkold]

@nayse It will show up on the MIB, however different underwriters take different decisions on the same data. Having it discovered rather than previously disclosed (say to an attending physician) will make getting a policy harder. I actually got an estate planning case issued standard with cocaine in the APs records. However it was for a very successful business owner that the admission was a workup by a new attending physician and he just mentioned trying cocaine while in college some years before. Since then he had started and grown a medium sized ($10mm in sales) business with 250 employees.

Not admitting drug use then finding drugs in the blood/urine tests is a bit of a double whammy. Drug use combined with being untruthful.

 

[jeshurun1111]

@nayse Jesus Christ, man. Isn't cocaine out of your system in a couple of days? Why would you take that test right then? I honestly have a suspicion that it's not the cocaine underwriters hate as much as the likelihood that if you made this decision under these circumstances then how bad must it be when no one's looking?

You're hosed, probably for five years.

 

[needingpeace]

@nayse You might not be able to get coverage for a while. Permanent or term.

 

[soultired]

@nayse Somewhat related, I admitted to smoking a cigar for a bday in the year previous to applying for a WL policy. Was denied. Am not a smoker nor drink but as I had "smoked" a cigar (no inhaling of course), I was denied as you were. Fwd a year and was labeled non-smoker and could re-apply. This time was approved.
Important lessons can be drawn from this example, takeaway up to the reader.

 

[jonthesaint86]

@nayse It’s stuck with MIB now

 

[koh]

@nayse It’s in your medical history now. The next carrier will still see it, regardless of how you test. You might not get declined. But you’ll have to pay a pretty steep premium now

 

[ativyl]

@nayse You are in a pickle. Cocaine test are exceeding accurate. Benzoylecgonine, what they test for, is in cocoa leaves and that's about it. Given how likely cocaine is to cause early death it rightfully is going to jack up your insurance rates tremendously.

Let's take a huge step back. What was the purpose of the insurance policy? What were you going to do with it? I like permanent insurance as an alternative for taxable fixed income to bonds. But that doesn't mean you can't use bonds to get a result almost as good.

 

[nayse]

@ativyl This was specifically just what my financial advisor told me to do for a long term retirement type deal. I’m M24 and all of my other tests came back with decreased risk so I’m not worried about my health particularly just embarrassed that I have to go to my advisor now and say I need other options.

 

[danpol]

@nayse I'm not your financial advisor but I am a financial advisor, and I'd tell you at 24 years old you likely should not be using life insurance as a retirement accumulation vehicle unless you are already maxing out every other tax advantaged means of retirement savings first. At age 24, I'd presume that is unlikely.

You may be able to obtain a small amount of graded death benefit whole life insurance that could pay for funeral expenses after 2-3 years of the policy being in force. If you intend to continue with the drug use then you should have something in place to address premature death.

 

[ativyl]

@danpol He might not be using it as retirement at all. For example this might be where he is saving for a house. Or he might be margining stock and using the permanent life policy to take the offset cash thereby creating synthetic offsets for short term gains (which incidentally I'm doing for myself).

I don't like the fact that OP doesn't know what it is for.

 

[ativyl]

@nayse You should know what your financial plan is. It is great to go to an advisor to get advice but you should know why you are doing things with all your investments. How the investments fit together. You aren't getting advice.

 

[tamaraz]

@nayse Is there a reason you're going with permanent? What's the cost and coverage amount?

 

[levnishbar]

@tamaraz It's not like he'd get approved for term right now anyway.

 

[mattv03]

@nayse One of the reasons I avoided fully underwritten ,you never know what will turn up & now you have a decline that shows in the system .Guaranteed Issue is your best course of action for now