With medical marijuana legal in 33 states and recreational use legal in 10 states, it was just a matter of time before life insurance companies had to start looking at marijuana usage much differently than in the past.
Not all insurance companies see the usage of marijuana the same, so read on to find out which ones have the most favorable views.
Marijuana is the world’s 3rd most popular recreational drug, only behind tobacco and alcohol. According to a Gallup poll in 2015, 44% of adults in America have experimented with marijuana.
This makes marijuana the most used illegal drug in the United States. When we say illegal we mean federally, since we have mentioned how many states it was legal to consume above. Life insurance companies are looking at marijuana and life insurance differently these days.
When it comes to purchasing life insurance, it’s important to understand that life insurance carriers consider marijuana use in many different ways. Some will classify users the same as tobacco smokers, while others take into consideration the frequency of use and any medicinal purposes.
This is why it’s important to work with an independent agent who specializes in knowing which carrier is most lenient when it comes to marijuana use.
If you decide to be fully underwritten for your life insurance policy, which means doing blood work and giving a urine specimen, marijuana usage will show up in the labs. There is no way of hiding this.
If you decide to go with a no-exam life insurance policy, marijuana will not be detected unless otherwise noted in the application. In other words, if there’s no history of usage then it may be more beneficial to apply for a no exam life insurance policy first.
Most life insurance companies are conservative by nature. They take a look at a customer’s life, including hobbies and personal history, and decide if there is anything that makes them a risk to insure.
During the underwriting process, you are assigned a health classification or rate depending on your health, hobbies, and family and personal history. The more risk that you are, the higher the premiums will be.
Depending on the amount of life insurance that you are applying for, most companies require a medical exam. This means blood and urine is tested. So, if you have used or consumed marijuana in the last 14-30 days, there is a good chance it will show up in the medical exam. Keep in mind that frequency of use also plays a role in how long THC remains in the urine.
Because there has not been a lot of testing done on the short and long-term effects of marijuana, it’s really hard for underwriters to judge how much of risk it will be. This usually leads most insurance companies to lump marijuana users in with tobacco users, although some will give a non tobacco rating.
Until testing has been done and scientists can say without a doubt that marijuana smoking is safe and doesn’t have a negative impact on one’s health, insurance companies are going to be cautious on this matter.
The less that you smoke, just like with tobacco, the better health rate you will qualify for. This will mean lower premiums, saving you money. Also remember, if you smoke tobacco and marijuana you will receive tobacco rates.
Medical Marijuana & Life Insurance
Just like with any prescribed medication, most insurers will consider medicinal marijuana use upon a review of their medical records. Depending on what the marijuana is prescribed for will affect the premium rate.
In most cases with medicinal marijuana use, it’s the health condition itself that causes the rate increase, not the use of marijuana.
Marijuana and Life Insurance: What company is best?
Lincoln National Life
- Best Scenario: Preferred Plus Non-Tobacco rates if you use marijuana once per month. Preferred Non-Tobacco rating if you use no more than 2 times per week.
- Worst Scenario: Using marijuana more than twice a week, or signs of alcohol or other drug abuse, may cause you to be declined or premiums to be much higher.
- Medical Marijuana Scenario: Rates will be based on the condition for which the marijuana was prescribed for.
North American
- Best Scenario: Recreational use for consumers over 21 usually receives a standard non-tobacco rate. Cases are looked at on an individual basis.
- Worst Scenario: Heavy marijuana use could lead to tobacco rates or even a decline.
- Medical Marijuana Scenario: No set guidelines.
Prudential
- Best Scenario: Standard Plus ratings are available if you only use 3 times per week or less. Must disclose marijuana use during the application process.
- Worst Scenario: Heavy marijuana use (more than 7 times per week) will result in a decline. If you do not disclose that you use marijuana during the application process and its discovered, automatic decline.
- Medical Marijuana Scenario: Rates will be based on the condition that the marijuana was prescribed for.
MetLife
- Best Scenario: Recreational use of marijuana up to 4 times per week would be a standard non-tobacco rate. Could receive preferred or elite plus if there are no signs of alcohol or drug abuse.
- Worst Scenario: Heavy marijuana use could lead to tobacco rates or even a decline.
- Medical Marijuana Scenario: Rates will be based on the condition the marijuana was prescribed for.
United of Omaha
- Best Scenario: Standard Non-Tobacco rates for using marijuana use of 3 times or less per month.
- Worst Scenario: Using marijuana more than the 3 times per month could lead to tobacco rates or even a decline.
- Medical Marijuana Scenario: Rates are based on the underlying condition but usually are tobacco rates.
AIG – American General
- Best Scenario: If you use marijuana no more than 2 times per month you can qualify for Standard-Non-Tobacco Rates.
- Worst Scenario: If you smoke more than 2 times a month, then standard tobacco is best rate possible. However, your frequency will be looked at individually and it’s possible to get rated or declined.
- Medical Marijuana Scenario: A prescription is required and the condition for which the marijuana is prescribed will dictate your rating.
Transamerica
- Best Scenario: Standard Non-Tobacco rates for marijuana use of 12 times or less per year.
- Worst Scenario: Standard Tobacco, rated, or even declined depending on frequency of use.
- Medical Marijuana Scenario: Prescription required. Standard Non-Tobacco possible depending on underlying condition and frequency of use.
SBLI
- Best Scenario: Standard Non-Tobacco rates for rare marijuana use with admission during application process.
- Worst Scenario: Tobacco rating depending on how often marijuana is used, and even a decline for heavy usage.
- Medical Marijuana Scenario: Rates are based on the underlying condition but usually are tobacco rates.
Legal & General America
- Best Scenario: Standard Tobacco rates for recreational marijuana use and no criminal history or drug abuse history.
- Medical Marijuana Scenario: Standard Tobacco rates always and the underlying condition for the prescription.
Protective Life
- Best Scenario: Standard Tobacco rates for using recreational marijuana.
- Medical Marijuana Scenario: If you smoke marijuana, tobacco rates apply. If it’s used another way, such as patch or edibles, then standard non tobacco is an option. Also depends on underlying issue.
Minnesota Life
- Best Scenario: Preferred Non-Tobacco rates if you smoke 24 times or less in a year. Anymore than 24 times is standard non-tobacco and based on individual usage.
- Worst Scenario: Anymore than 24 times is standard tobacco rating and based on individual usage.
- Medical Marijuana Scenario: Rates are based on the underlying condition but usually are tobacco rates.
Don’t Lie to the Life Insurance Company
This rule applies to all consumers looking to buy life insurance, not just marijuana users. If you lie to an insurance company during the application process and they find out, they will decline you.
Not only are you declined from this life insurance company, but all the life insurance companies will have access to this information. This will keep you from obtaining life insurance with anyone else in the future.
All information pertaining to your life insurance application, even the lies, are reported to the Medical Information Bureau, or MIB. The MIB is similar to a credit report. It’s a report that life insurance underwriters use that contains all history of previous applications applied for.
If by chance you do sneak through and get accepted after lying, the insurance company could find out later and could cancel during the contestablility period. This would leave you and your family unprotected.
Term Life or Permanent Life for Marijuana Users?
This is a question we get alot. The simple answer is that it will depend on which type of life insurance fits your situation and most of all your budget.
Term life insurance is the simpliest form. You choose the death benefit and how many years you would like the coverage, usually 10-30 years. The life insurance company assigns a premium based on your age, health status, amount of life insurance, and how long the term period is. These policies don’t build up any cash value and terminate at the end of the term period chosen, leaving you without life insurance if you outlive the policy.
Permanent life insurance is just like it sounds, permanent. You will have coverage for your entire life as long as premiums are paid. These policies tend to be 5x as much as term life insurance for 2 reasons, they build up cash value and coverage lasts forever. The 2 main types of permanent life insurance are whole life and universal life.
Our Thoughts
To be honest, there is no simple guideline to how life insurance companies view marijuana usage. As you can see from our list, the insurance companies all have different outlooks. With this said it’s important to work with an independent insurance agent who has access to multiple companies. This will ensure that you are paired up with the company that best fits your needs. If you have any questions or comments please don’t hesitate to contact us.