It’s no great shock that lifestyle is so important when it comes purchasing affordable life insurance. Your physical health, mental health, family medical history, gender, age, occupation and even hobbies – these are all typical aspects that affect your life insurance rates. Knowing this, what do you suppose will happen when you add marijuana use to the mixture? Its purpose (recreational or medicinal), the frequency and several other aspects related to marijuana use matter even more than marijuana use itself when it comes to the cost of getting life insurance coverage. Here, we’ll discuss the marijuana and life insurance.
When it comes to life insurance applications, honesty is always the best policy. All life insurance policies are legal contracts between an insurer and the insured. Because of this, when you submit the life insurance application, it is essential for it to be accurate, detailed, and complete.
Non-disclosure of pre-existing medical conditions and elements of your lifestyle can end up in rejected claims during the policy’s contestable period, which basically means that a policyholder could pay their insurance premiums consistently for months or even years, only to discover that the death benefit will not be offered to their family when it matters the most to them.
Although it may be enticing to hide your marijuana use, don’t do it. Life insurance applications are covered under HIPPA (Health Insurance Portability and Accountability Act), which means anything you disclosed on your application cannot be shared with third parties. Additionally, marijuana is by far the most popular recreational drug in the United States. With continued efforts to decriminalize and legalize the drug getting momentum across the country, more and more people are speaking a lot more openly about marijuana use.
The Bigger Picture is What’s Important
It is a fair statement that most life insurance companies consider marijuana use (either recreational or medicinal use) into their life insurance underwriting decisions. But what might amaze you is how significant or insignificant the effect may be on your actual insurance rates. In fact, nearly 30 percent of life insurance companies said some marijuana users could qualify as nonsmokers, which in turn allows them to be eligible for the best rates. In every case that concerns marijuana use, the details make the difference.
- Purpose of Use – The insurance underwriter will first want to determine if your marijuana use is recreational or medicinal or both. If your purpose of use is medicinal, the marijuana will be treated like any other prescribed medication. This means that the insurance company is more concerned about why you are using medicinal marijuana. Is it to treat pain, nausea, insomnia, or some other symptom you are having, and if so, what medical reason is causing the symptoms. Regardless of the symptoms being treated, it is the health condition that must be considered when determining your insurance rate.
- Frequency of Use – When it comes to recreational marijuana use, how frequently you use marijuana is what matters the most. Ultimately, the frequency of use establishes your rates. Your frequency determines whether you will be classified as a smoker or nonsmoker. The frequency tolerance is specific to each insurance company, with some carriers allowing weekly use and other carriers only allowing monthly use to qualify for the much lower nonsmoker insurance rates. When you are considering life insurance quotes, asking about these details is critical.
- Additional Factors – Along with looking at the reason and frequency of your marijuana use, your insurance company will also consider various other factors. Most insurance companies will look at whether or not the applicant smokes cigarettes or consumes alcohol. The regularity, the quantity and the number of recreational drugs—alcohol, cigarettes or marijuana—consumed really matters. Moreover, insurers will also consider if marijuana might impact an applicant’s criminal record. Underwriters will inquire about an applicant’s driving record to see if major violations like DUI/DWI and reckless driving charges are present. They are also likely to inquire about misdemeanor and felony charges. Finally, any applicant that is associated with a marijuana business such as a grower or store in states where legal, will be denied coverage.
Marijuana and Life Insurance Companies
As insurance companies take a more liberal stance on marijuana, there are some carriers that are a lot more lenient when assigning rate classes. The most important issue is that the applicant finds a carrier that will consider a marijuana user as a non-smoker (as long as the applicant doesn’t smoke tobacco). The difference in non-smoker and smoker rates is substantial.
The companies that have the most liberal underwriting guidelines for marijuana users are:
MetLife will allow applicants to use marijuana up to four times a week and still be rated as a standard non-smoker, and once a week use can earn preferred rates. As of this writing, we are not aware of any other carrier with such liberal underwriting guidelines. The difference in the rates is fairly extreme puts this company at the top of the list.
We consider Prudential to be marijuana friendly because it will allow a standard rate for marijuana use up to three times a week. Prudential also receives high marks since they are preferred company for high-risk cases which is very important for medicinal users that are prescribed for a serious underlying condition.
This company makes our “friendly” list because they will allow up to two uses per month and still qualify as a standard non-smoker. This may not appear to be very liberal but remember, most carriers will assign a smoker rate for any use. They will consider better rates on a case by case basis if the applicant strictly uses edibles.
For consumers who are considering life insurance and are concerned about the impact marijuana use may have on your rates, calm down and chill out. These aren’t you daddy’s insurance companies.