What To Do When The Client Says, But Ive Only Done Drugs Once!

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With your feet up on the desk, you are dreaming of your trip to Times Square to ring in the New Year. The phone rings. Your smile disappears when you learn that the life insurance case in underwriting that would have paid for your trip was just declined “for confidential reasons.”

Although there are a number of reasons for a “confidential” decline, by far the most common is a positive test for “California Entertainment Disorder” caused by inhalation of a certain white powdery substance (no, not flour).

One way or another, the proposed insured will find out why he or she has been declined. You may hear the clients stressed response: “Ive only done it once; can you help me get coverage?” Well, maybe.

A very direct discussion with the proposed insured is in order. Forget those who are in complete denial. If youve checked the chain of custody of the lab work, and if it is intact, there is little you can do.

But what if youre pretty sure theyve done it “only once?” How do you document that, indeed, this was likely a “one-time” indiscretion?

For starters, you should know that some insurers will work with you, especially if you give those insurers lots of good business as well.

Our agency recently had a client who was looking for $5 million of buy-sell coverage for himself and his business partner. The case looked completely uneventful … until the day the “confidential” decline arrived.

When the producer called his client to inform him, after some prodding, the embarrassed client recalled that his 40th birthday party on the weekend prior to the exam “was perhaps a bit long.” However, he could not recall the details. Some party it must have been!

Fortunately, this producer did a lot of business with a life insurer willing to listen to the proposed insureds story. Here are the steps taken to negotiate an offer:

The producer provided a strong cover letter about his long and professional association with the proposed insured. He attested to his customers normally high moral standards and positive involvement in the community. He also stated that he has no reason to believe his client is a drug abuser.

The client wrote a one-page letter to the underwriter “coming clean” and discussing his one-time use and his regret and embarrassment over the whole affair.

The insurance company offered to review the evidence if the client did a hair follicle test at his own expense (approximately $300). Note: Some studies suggest that hair follicle testing can indicate chronic drug use.

The underwriter also requested new labs with a complete drug screen.

The underwriter requested a special inspection report, presumably checking with more than the usual number of sources in regard to “lifestyle issues.”

The client agreed to all of the above. He did the hair follicle test and provided a new urine specimen. Both were found to be clean, and coverage was ultimately offered at standard rates.

You, too, may be in a position to save such tough cases. Before you invest any additional time, however, first determine if it is indeed likely that your client engaged in drug use “only once.” Ask some most pertinent questions, such as those in the chart, and provide the details to your most experienced underwriter for assessment.

With an honest client who indeed did drugs “just this once,” it should be possible for you to negotiate for life coverage somewhere–and get paid in time to spend the New Year at Times Square!

manages the Los Angeles, Calif., office of BISYS; this office assists with advanced sales solutions, jumbo case underwriting and impaired risk negotiations. You can e-mail him at stefan.bruckel@bisys.com.

Key Questions Needed To Determine Insurability

  • Date of last drug use?
  • Specific drug used?
  • Frequency of use in past?
  • Treatment completed (details)?
  • Current attendance at Alcoholics Anonymous or similar?
  • Is client willing to “come clean”?


Reproduced from National Underwriter Life & Health/Financial Services Edition, November 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.