Life Insurance and Marijuana Usage

Prior to becoming a financial advisor and offering life insurance, I had to admit I never would have thought that a marijuana user would get approved for term life insurance coverage. After being in the business for several years and running several quotes, I quickly realized that this was not the case.

Insurance Options for Marijuana Smokers

There are several insurance companies that will insure marijuana smokers. The trick is finding the ones that will be the most affordable.

High-risk individuals, such as marijuana smokers, are more likely to pay higher premiums due to their extracurricular activities. Smokers are high-risk applicants, which means higher premiums, but that doesn’t mean your wallet is going to sweat every month when you have to make those premiums.

Marijuana and Life Insurance 

If you saw the previous post that addressed getting life insurance with a DWI, you’ll see how much more one would pay.  In that post, the individual was looking for a ten-year $250,000 policy, and they had been cited with a DWI over four years ago.  What I didn’t mention in that post was that the individual also was a casual marijuana user.

As a recap, that individual had applied to two other life insurance companies and was declined for both.  They didn’t seek the services of an independent life insurance agent and instead went with the cheapest term life rate possible.

What they didn’t realize was that going with the cheapest rate if you have a high-risk condition, is not always the best option.  In this individual’s case, we got him approved through Prudential for $585 per year for a ten-year term life policy.  His health class was a standard non-tobacco use with a Table 2 rating.

This table rating wasn’t strictly because of the marijuana use but more for the DUI and the alcohol consumption coverage per week.  It’s important to note that some carriers, even if you are a casual marijuana smoker, will rate you but will do so at a preferred smoker rate to fall under if all other health conditions are in line.  It’s important to know which carriers to partner with depending on what your condition is and how often it might occur.

Smoking Marijuana, Be Honest 

Let’s get this out there right away: Tell the truth when you apply for life insurance.

Here’s a scenario to show you why being honest about your marijuana use matters:

When you buy, say, $1 million in term life coverage, you’re doing a very responsible thing.

You’re putting the tools in place for your spouse or other family members to survive financially without your income.

If the worst happened, and you died in a car wreck, for example, your family could file a claim and get a check for $1 million, tax-free, from your insurance company.

As you can imagine, the insurance company doesn’t write $1 million checks without asking at least a few questions first:

For one thing, they would ask the highway department about your car crash. Let’s assume alcohol and drugs were not a factor in the crash.

Wouldn’t that end the discussion?

Maybe not.

What if you happened to have a Ziploc baggie of marijuana in your glove compartment?
Or what if it was just a package of rolling papers?

The accident report may very well include those details, which means your insurance company would find out about them, too.

The insurer would then check whether you disclosed marijuana use in your application for coverage.

If you didn’t, and if they determined from other sources, such as medical records, that you had an undisclosed history of marijuana use, your family’s claim could be in jeopardy.

All the premiums you’d paid, all the thought and consideration you put into your policy, would not help your loved ones after all.

By being fully open and honest in your application and throughout the underwriting process, you’ll help make sure the coverage you’re buying will be available to your family if they need it. (And you won’t be guilty of insurance fraud!)

By the way, honesty shouldn’t pertain only to marijuana use.

Tell the truth about your other habits, hobbies, and health issues.

It is better to pay a higher premium for the right coverage than to risk leaving your family unprotected.

Marijuana Use: Not a Life Insurance Dealbreaker

Once upon a time, disclosing marijuana use would have snuffed out your life insurance application.

Underwriters would have immediately denied coverage without needing to even think about it.

My how times have changed.

Not only can you get coverage, you could possibly even get coverage without paying much, if any, extra premiums.

Finding great coverage at a great price may still take some inside knowledge and maneuverability.

Start by addressing these important factors.

Can You Get Non-Tobacco Rates as a Marijuana User?

Cigarette smokers pay a lot more for life insurance because tobacco destroys your health, and I’m not just talking about lung cancer.

Smokers have higher risks of stroke, heart attack, asthma, and other serious lung diseases such as emphysema.

So, if underwriters see your marijuana use as a reason to classify you as a smoker, you’ll pay high rates along with tobacco users, even though your recreational marijuana may not impact your health the way tobacco smoke does.

As a non-tobacco user, you should find an insurance company whose underwriters do not automatically categorize marijuana users as smokers.

Why Do You Smoke Marijuana?

Underwriters will want to know why you smoke marijuana.

If you use pot because it’s fun, that is, because you enjoy sharing a joint once in a while with a friend or two, indicate that on your application.

Some applicants I’ve known found it tempting to check the “medical reasons” box, probably because many states have more lenient laws allowing for prescription use.

Be careful here, though.

If you select “medical reasons,” underwriters will be ready with a follow-up question: “Just what kind of chronic medical condition do you have?”

Why?

Because underwriters fear chronic health conditions like, well, the plague.

An applicant who needs marijuana to get through the day is an applicant who’s probably in pretty bad health.

And an applicant in bad health may soon be filing a claim, which means such an applicant needs to pay more or else should be denied coverage.

Again, it’s all about honesty.

If you smoke pot because it’s fun, just say so.

How Often Do You Smoke Marijuana?

This is a biggy.

Your answer may determine whether you can access non-tobacco rates, which, as you know, will have a dramatic impact on your premiums.

If this is starting to sound familiar, I apologize, but it is important.

When your application asks how often you smoke marijuana, be honest.

Even if your answer classifies you as a smoker, that’s OK.

With so many life insurance companies out there, you may be able to find a company whose underwriters look more favorably on your answer.

Which Insurance Companies Will Cover Marijuana Smokers?

Insurance companies such as Banner, Protective, Genworth, and Transamerica are just a few of the big names that will insure marijuana smokers.   The only problem is that you will be rated Standard as a smoker.

What does that mean?   Higher premiums!

If you’re just an occasional user, then you’ll want to explore some other options.

Lincoln National will allow up to two times per week and rate you as a Standard non-smoker.  If you smoke more than that, expect your premium to go up.

Prudential and Minnesota Life will also rate you as a non-smoker, but you can only smoke 2 times per month, and they’ll run labs on you, which you must test negative for THC.

Here’s an extensive look at how the various  carriers view marijuana smokers:

• American General – 2X/yr not a concern, OK at PBNS; up to 2X/month SNS; more than 2X/mo possible rating and tobacco rates; medicinal use must be documented in APS w/ underlying condition for the Rx and rated for cause

• Assurity—Std Smoker, up to 1X/day

• Aviva—occasional MJ use, up to 8X/mo, OK in Prfd N/S classes; Rx will depend on cause

• AXA—Standard Tobacco for up to 2X/week; more frequent T2; Rx daily use T2 (individual consideration for better)

• Banner – admitted occ use is Std Smkr (including ingestible); admitted daily use T B; unadmitted use T B; medicinal Std to T B, depending on frequency

• Fidelity—recreational use up to 3X/mo is Std Tob; any use in past 12 mos Std Tob; Rx rated for cause

• Genworth – use 8X/mo is StdSmkr; more than that would be rated, depending on frequency; >16X/mo is decline; Rx use is not recognized—rated same as non-Rx

• ING – PrfdSmoker A25+, w/ use up to 8X/mo; T2 for 8-16X/mo; decline for more frequent; Rx usually T4, and only allowable w/ chronic pain, epilepsy or MS, plus rate for cause

• John Hancock – Standard Smoker: Rx is treated no differently, and the amount of use will determine the rating

• Lincoln Benefit—occ use is StdSmkr; medicinal MJ use considered as non-tobacco if ingested and not smoked–must be admitted on the app and documented and rated for the cause– usually min T4

• Lincoln National – Standard Nonsmoker up to 2X a week; Table B for 3-4X, decline for more than 4X

• MetLife – 1X/week non-smoker; up to 3X/week StdSmkr; >3X.week T2 or worse; Rx is StdSmkr unless cause is rateable

• Minnesota Life— occasional/recreational OK at PNS; if HOS+, then smoker T3; daily use usually a decline; Rx use generally T3

• Mutual of Omaha— SNS up to weekly—and HOS reflects same; if more frequent use or HOS level indicates more frequent, then Smoker rates will apply; Rx will rate for cause, but min T4 generally (full review)

• Nationwide – Standard Smoker; Rx is rated for cause, then follow SwissRe for Rx MJ

• North American—Standard Tobacco; Rx use T4 and up

• Principal—Standard Tobacco—recreational or medicinal, frequency plays a factor, and guideline allows up to 8-10X/mo at Std.>8X/ mo would be rated; daily Rx would more likely be rated for the impairment more so than the MJ use

• Protective—Standard Tobacco; top rates as well

• Prudential –For up to 2X/mo, and neg HOS can offer SNS+; for up to 4X/week, can offer N/S Table B (and don’t have to show negative); for >4X/week, they decline; Rx use is rated for a cause—if no other narcotics, can go up to PBNS, depending on the cause

• RBC Liberty – Standard Smoker

• SBLI – typically Standard Smoker to Table 3; for non-smoker consideration, use must be determined to be extremely rare—once or twice/year; Rx would be rated for cause on smoker rates

• Transamerica – always Smoker rates; if rare and occasional, could be PrfdSmkr

Preferred Smoker Rates for Marijuana Smokers

ING Reliastar is the only insurance company I know that will rate you as a Preferred Smoker if you’re a daily marijuana smoker. This is the best-case scenario for any individual who is using it on a frequent basis.

Getting life insurance as a marijuana smoker isn’t easy. It’s a little more difficult, but it can be done. Every company has different standards for applicants who smoke, which means your quotes can vary from affordable to insanely expensive.

If you want to call dozens of companies yourself, go for it! It’s an excellent way to find affordable premiums. Instead of going at it alone, let us go with you. Through the years, we’ve helped applicants who smoke marijuana get cheaper coverage than they could find by themselves.

Disclosing Marijuana Smoking on Life Insurance Exam

Many felt if they disclosed that they use marijuana for fear of getting into legal trouble.  Rest assured, according to HIPAA laws, your life insurance agent is not allowed to turn you in to the police.  So don’t worry about being arrested if you mention to a life insurance agent or even the traveling nurse who may come to your home or office about your marijuana use.

The Bottom Line – Life Insurance and Marijuana Usage

Navigating the world of life insurance as a marijuana user can be complex, but it’s evident that many insurance companies are evolving their views to accommodate the changing societal norms surrounding cannabis.

Honesty remains paramount when applying, ensuring that the coverage secured truly protects loved ones. While marijuana use may impact premiums, with thorough research and understanding, potential policyholders can find affordable rates tailored to their needs.

Remember, the landscape of insurance is continually changing, and with increased acceptance and understanding of marijuana use, the future may offer even more options for those seeking coverage.