When a drug and alcohol exclusion is used to wrongly deny life insurance claims
Life insurance companies often rely on policy exclusions to avoid paying claims. One of the most commonly misapplied provisions is the drug and alcohol exclusion. This clause can be misused by insurers to deny claims—even when the deceased wasn’t impaired, and even if substances had nothing to do with the cause of death. If you've received a claim denial based on this exclusion, don't assume the insurer is right. You may have strong grounds to challenge it.
Life insurers have a financial incentive to deny valid claims
As attorneys who focus exclusively on wrongful denials of life insurance claims, we’ve seen all kinds of manipulative tactics used by insurers to escape their contractual responsibilities. It often comes as a shock to grieving families, but many people don’t realize that they have the right to challenge a claim denial. In fact, because insurers stand to profit from each claim they don’t pay, it’s often not just a good idea—but a necessary step—to appeal or litigate when a claim seems unfairly rejected.
Here’s the uncomfortable truth: life insurance companies are in the business of making money. And while they market themselves as providers of peace of mind, they operate on a model that prioritizes profits above people. The reality is that insurers earn the most when they collect years of premium payments and then find a reason—any reason—not to pay when the insured passes away.
Policy exclusions: the insurance company’s go-to excuse
Insurers often hide behind exclusions in the policy language. These are carve-outs that allow them to deny claims if the death falls under certain conditions. Some exclusions are fairly straightforward—like the commonly included "suicide clause" during the contestability period—but others are broader and more prone to abuse.
One of the most problematic is the drug and alcohol exclusion. It typically allows an insurer to deny a claim if the insured had drugs or alcohol in their system at the time of death. However, some companies stretch this provision far beyond its intended scope, denying claims based on mere association with drugs or alcohol—even if the death itself was clearly unrelated.
The drug and alcohol exclusion, misapplied
What makes this clause particularly dangerous is that it doesn’t always require the policyholder to have died because of substance use. In many cases, insurers deny coverage simply because toxicology reports mention the presence of a substance, regardless of whether it played any role in the fatal incident. Even indirect exposure or proximity to drugs can trigger a denial.
We handled a case that demonstrates just how far some insurance companies are willing to go to deny a grieving family their rightful benefits.
Sally's story: punished for being at the wrong place at the wrong time
Sally was a 58-year-old mother, recently divorced, and known for living a conservative lifestyle. She had never smoked, rarely drank, and had no history of drug use. After her husband left, she began to rebuild her life through community groups and church activities. Eventually, she branched out socially and made new friends—one of whom invited her to a party.
That night, Sally found herself in an environment that was foreign to her. Other guests were openly smoking marijuana, and she quickly realized she wasn’t comfortable. Despite the social pressure, she chose not to participate and stepped outside for air. After a short while, she called a cab to go home.
But she never made it.
On the drive home, Sally’s taxi was hit head-on by another vehicle that had crossed into oncoming traffic. The crash killed her instantly. Police documented everything in their report and ruled the death an accident caused by the other driver. The tragedy was senseless, and Sally had done nothing wrong.
A denial that defied all logic
When Sally’s son Jesse submitted a life insurance claim, he expected a routine process. After all, the cause of death had been clearly established. But instead, he received a denial letter invoking the drug and alcohol exclusion. The insurer claimed that because Sally’s clothes smelled like marijuana—according to the police report—she must have been using drugs at the time of her death.
This reasoning was not only speculative, it was downright insulting. Jesse knew his mother better than anyone and was certain she had never used drugs. But he also understood that his certainty wasn’t enough to persuade a billion-dollar insurance company.
At his father’s suggestion, Jesse reached out to an attorney who handled denied life insurance claims. The attorney immediately spotted the problem: the insurer was banking on Jesse giving up without a fight.
Building a case with facts—not assumptions
The legal team quickly got to work. They tracked down multiple attendees from the party, including Sally’s friend May. Each of them provided sworn statements confirming that Sally had not smoked marijuana or consumed anything intoxicating. In fact, they said she was visibly uncomfortable with the drug use around her.
Further, the lawyer contacted lifelong friends and church members who vouched for Sally’s character and sobriety. Finally, the most compelling piece of evidence was the coroner’s report, which included toxicology findings—completely clean. No marijuana, no alcohol, no drugs in Sally’s system at all.
All of this was presented to the insurance company as part of a formal appeal. It also came with a clear warning: if the company didn’t reverse the denial, Jesse was prepared to file a lawsuit alleging bad faith.
The insurer backed down
Faced with mounting evidence and the threat of litigation, the insurer backed off. They reversed the denial and paid the full policy benefit to Jesse, along with accrued interest. It was a victory—but one that shouldn’t have required so much work and legal pressure.
You have the right to challenge unreasonable life insurance denials
Sally’s story is a cautionary tale. It shows just how far insurers are willing to go to save money—sometimes at the expense of common sense and decency. If your claim was denied for reasons that don’t make sense, you owe it to yourself and your loved one’s legacy to question the decision.
You don’t need to face a massive insurance company alone. Our team has experience fighting denials based on drug and alcohol exclusions, suicide clauses, policy lapses, and more. We’ll review your case for free and let you know if we believe the insurer acted unfairly.
Don’t accept a denial at face value. Fight back—and win. Contact us today.
FAQ: Drug and Alcohol Exclusions in Life Insurance
Can a life insurance company deny a claim because of drug or alcohol use?
Yes, but only if the policy has a valid drug and alcohol exclusion—and the substance use contributed to the cause of death. Mere presence of a substance doesn’t always justify denial.
What if the insured wasn't using drugs, but was near others who were?
Proximity is not the same as use. Denials based on environmental exposure, such as clothing smelling of marijuana, can often be challenged successfully.
Does the coroner’s report override insurer assumptions?
Absolutely. A clean toxicology report can be critical evidence in appealing a wrongful denial.
Is it worth getting a lawyer for a denied life insurance claim?
In many cases, yes. A lawyer who specializes in life insurance can build a strong case, gather supporting evidence, and negotiate—or sue—on your behalf.
How long do I have to appeal a life insurance denial?
Appeal deadlines vary by insurer and state law, but the sooner you act, the better. Prompt legal advice is essential to preserve your rights.