As of 2019, more than half of the total US population support the legalization of marijuana. A total of 33 states have given their approval for its medicinal use. There are 10 states where marijuana is legal both for recreational and medicinal use, while 13 states had it decriminalized.
But even with all this progress on policies towards the use of marijuana, a big portion of its users are still in the dark when it comes to getting a life insurance policy. Most of them think that marijuana use makes them unfit for regular premium rates or worse, assume that they will get declined.
Well here’s some good news if you are a marijuana user and want to purchase a policy: It’s easier to get life insurance today, and yes, there’s a good chance to get standard premium rates.
The Big Question: Can I Get Life Insurance If I Use Marijuana?
Yes, you most definitely can!
The last few years saw some life insurance companies tweak their views towards marijuana use. Compared to a decade ago, it’s easier to get a policy now as a marijuana user. Note though that each company’s views and underwriting policies will vary from one another hence the importance of comparing them and shopping around.
The biggest challenge among insurance companies is that there are still not enough medical studies about the long term use of marijuana on a person’s life expectancy. So even while some of them are becoming more lenient in approving applicants who use marijuana, there are still some companies who remain conventional in their views and hence put a high price on premiums.
According to a report by PBS, 71% of life insurance companies classify marijuana users as smokers. But while that may sound dispiriting to marijuana users, think about it: 29% of life insurance companies today may give you a chance to get a standard non-smoker rate.
And with almost 800 insurance companies in the US today, there’s plenty of options to choose from. Your chances today are much better than what you would have say, 5 or 10 years ago. Companies then may have even completely deny you of a policy for marijuana use.
How Does a Life Insurance Company Grade Marijuana Use?
These companies may grade marijuana users as tobacco smokers, which means they’re likely to get appraised for the same high rates (almost 200% in most cases versus non-smokers). However, some companies may be more lenient and give marijuana users non-smoker rates. This depends on how they use marijuana, how often they use it, and what they use it for.
One thing that we would definitely caution you against is lying about marijuana use when applying for life insurance.
When you apply for term life insurance for example, the medical exam will include urine or blood tests. These tests will reveal any traces of THC (Tetrahydrocannabinol), which is the main chemical responsible for the effects of cannabis. THC appears in your bloodstream at an estimated 3 to 14 days after marijuana use. And it can be detected in your urine for up to 30 days.
If they find out that you lied about your marijuana use, you’ll most likely get reported to the Medical Information Bureau (MIB). MIB is essentially an organization formed by insurance companies to share information for use in underwriting. When you lie and they find out, you’ll get red-flagged. And you will have a difficult time getting a life insurance policy moving forward.
And even if you were successful in hiding your marijuana use during the exam, if the company finds out afterward, they may cancel your policy or deny your beneficiaries’ claim, leaving them nothing from your policy.
How Do Life Insurers Classify Cannabis Use?
As mentioned above, companies have different views towards marijuana consumption. However, most of them look at the following three factors.
- The reason for using marijuana
- Are they using it for medical or recreational purposes?
- How often they use it
- If marijuana is used for recreational purposes, how often is it being consumed?
|Frequency of Use||Description|
|Intermittent/Experimental||For users who may have tried using it but already stopped. It also applies to those who use it for less than twice a month.|
|Moderate||For those who use cannabis an average of 8-16 times monthly|
|Heavy||For those who use cannabis for 4 times or more per week|
- If they’re using it for medical purposes, what disease/illness is it treating?
- For people who use cannabis for medical reasons, which illnesses or diseases are they using it for? In this case, the underlying disease is of bigger importance to the underwriter. Knowing it is a big determinant in assessing a person’s risk profile.
- In some cases, cannabis is used for the treatment of long-term pain or anxiety. So, the underwriter will also need to take this into consideration.
How Marijuana Affects Life Insurance Rates
The important thing to remember is that underwriting for Marijuana users will still depend on the person’s overall risk profile. The use of cannabis is just one factor among many variables. When it comes to its effects on the underwriting process per se, it will vary from person to person.
Recreational Vs. Medical Use
For example, let’s say one person smokes pot once or twice a month for recreational purposes. When he gets quoted by the first insurer he applies at, he receives a smoker’s rate due to their strict guidelines on marijuana use. He goes to another insurer but this time gets assessed with a standard rate because the company considers less than 2 times a month as infrequent/low use to be tagged as a smoker.
Say another person who uses marijuana to treat chronic pain applies for a policy. He explains why and what he uses it for. The company now needs to assess him for the medical condition that cannabis is being used to help with.
If he uses it to relieve symptoms of Crohn’s disease, for example, then the risk assessment will now include the actual illness that marijuana treats. More questions will be asked about it so the proper risk profile can be obtained.
In our first example, marijuana use directly influences the risk profile since it’s being categorized in the same vein as smoking (inhalation). In our second scenario, the company finds out that it’s used for medical purposes. They now probe further into the details of the disease/illness that’s being treated and factor it during underwriting.
But what if I ingest it instead of smoking it? Unlike tobacco, cannabis can be consumed in a number of ways. However, most insurance companies will still tag cannabis users with smoker rates regardless of the intake method. The most important consideration for them is frequency.
Some companies will give a standard non-smoker rating to a marijuana user given that they rarely consume it (once a month, for example). Others even extend it up to 4 times a month max.
Other aspects of a cannabis user’s lifestyle can also affect an insurance company’s views of marijuana. For example, if a marijuana user has records of DUI or excessive alcohol use, it may negatively affect their risk profile even further (aside from the underwriting effects DUI offenses itself) as the company may view the person in a bad light for his lifestyle habits.
Privacy Concerns: Your Rights As A Marijuana User
One of the biggest concerns of marijuana users is privacy. There are still people out there who think that revealing their use of cannabis can lead to an arrest.
Let’s clear this issue once and for all: The insurance company is legally bound to not disclose any private information about their policyholders, and this includes marijuana use. Your agent can’t report you to the authorities or notify your family or employer.
These rights are under HIPAA, which stands for Health Insurance Portability and Accountability Act 1996. This law states that “the privacy of individually identifiable health information” is safe and guaranteed.
Through this act, no third party is allowed to access your health records without any official prior written consent from the person. Even the life insurance company and its agents, the person who conducted the medical exam, or the underwriter who interviewed you cannot disclose any information about you.
Tips for Getting Best Term Life Insurance Rates For Marijuana Users
Term life insurance is widely considered as the best choice when it comes to price-to-benefit ratio. With just a couple of dollars for premiums per month, you can get covered for a few hundred thousand dollars and even up to a million. Here are some ways you can get the best term life insurance premium rates if you are a marijuana user.
- Try to work with an independent insurance agent or agency. They have the experience working out deals for these cases and have the necessary network to execute them. They can reach out to multiple insurers and compare quotes to come up with the best offer.
- Look for companies with more lenient guidelines when assessing marijuana use. You can check out the list below for our recommendation. These companies may provide you with a Standard Non-Smoker rating as long as you don’t exceed the frequency limit.
- Never, ever lie about your use of marijuana. There’s a very high chance that insurance companies will find out. And if they do, they may have the right to cancel the policy (depending on their terms and agreement) or deny your beneficiaries of a claim. You’ll also have a difficult time getting insurance moving forward since they will report it to the MIB.
Best Term Life Insurance Policies For Marijuana Users
As mentioned earlier, insurance companies consider the frequency of use as the main determinant for classifying a marijuana user’s risk level.
That being said, the following companies tag a marijuana user with a smoker’s rate depending on how many times a month they smoke.
Lincoln National – Standard Non-Smoker rates if no more than 2x a week of marijuana use
Prudential – Standard Non-Smoker rates if no more than 2x a month of marijuana use
Protective – Excellent rates classified as Standard Tobacco
Mutual of Omaha – Standard Non-Smoker rates if no more than 1x a week of marijuana use
Almost all insurance companies will tag the applicant with a Standard Smoker rate or even Table Rating if it does not meet their minimum frequency limits. It doesn’t mean, however, that their appraisal of premiums will be the same. It’s highly possible to get better rates from a different insurance company even though it’s for a Standard Smoker’s rates.
The bottom line: Shop around for the best rates starting with our recommendations above.
The landscape of life insurance has changed dramatically towards it’s view of marijuana use. Nowadays, it should not concern people too much if they use cannabis and want to get a term life insurance policy.
No need to resort to getting a guaranteed issue life insurance right away. They will simply get tagged with a Smoker’s rate on most cases and even with a standard rating depending on the frequency of use.
Of course, it’s still more expensive compared to regular non-smoker rates but hey, you now have plenty of choices and rates are more favorable towards marijuana users now versus a few years ago.
And with more states giving their OK sign towards its legalization, it only means more people will likely use them. Not giving marijuana users a fair treatment will be a big mistake for insurance companies, hence, they too, are adapting. And with the current trends we’re seeing, life insurance companies with progressive views towards marijuana use will likely influence bigger insurers to do the same.
If you’re a marijuana user looking to get the best term life insurance policy, you can speak with one of our financial representatives and get advice on your options. You can also get a free life insurance quote by clicking here.