When you apply for life insurance, insurers collect information about your health and lifestyle to calculate your risk levels, and your rates. So, uh, what if you’ve got April 20th circled on your calendar . . . and not because of a birthday or anniversary?
Can you still get life insurance if you use marijuana?
Once upon a time, the answer may well have been a hard no. These days, developments in scientific research and more permissive legislation in some states means that 420-friendly insurance providers aren’t unheard of.
Marijuana is the most common illicit drug in the United States, with over 22 million monthly users. Beyond that, it’s also the drug that’s seen the most legislative changes in recent years, as its legal status has been changing rapidly.
American culture has made quite a few changes since the era of commercials featuring sizzling eggs and serious voices proclaiming, “This is your brain on drugs.”
Forty-six states and the District of Columbia have passed laws permitting some type of medical cannabis use. (Thirteen of these states have laws permitting cannabidiol (CBD) or low-THC medications.) Meanwhile, ten states and D.C. have legalized recreational marijuana use, as well.
Coleen Moser, associate director at ESMI Underwriting, has 32 years of experience in the underwriting industry. Plus, she helps to underwrite Fabric’s own life insurance policies.
An underwriter’s job is to figure out what the risk is that you’ll die during the insurance term, leading to the insurance company paying the death benefit. Your health is a major factor in calculating that risk.
Through her years of experience, Moser has had a behind-the-scenes look at the evolution of insurance companies’ policies on pot. “When I first started, you wouldn’t touch anybody who used marijuana, period. It was considered a gateway drug,” she says. States and insurance companies still vary in terms of rules, but in some cases, the tide is turning when it comes to marijuana use.
“The insurance industry overall can be very conservative,” she says, “but as further information has come out about marijuana use legally, the feeling now is we can probably rate around that.”
Here’s what underwriters are thinking as they process a marijuana user’s insurance application. This general thought process holds true for both term and whole life insurance.
Provided that the insurance provider does consider marijuana users (rather than denying any applicant using the drug), the first question is whether there’s a medical need.
If an applicant is using marijuana medicinally, the fact that they’re consuming marijuana takes a backseat when assessing their risk levels for life insurance.
“It doesn’t become so much the cannabis use that they’re assessing, but what it was prescribed for,” Moser says. “You’re going to be underwriting based on the concerns you have about that.” Doctors may prescribe medicinal marijuana for a variety of conditions, including mental health issues like anxiety and depression, cancer, multiple sclerosis or some seizure conditions.
Marijuana is still illegal on the federal level, even in states that have passed their own legislation to legalize the drug. Just as you see different opinions about whether legalizing marijuana is a good idea, you’ll likely encounter some insurance companies that take a hard line against pot, and others that are more open.
If you’ve found a provider that takes the latter approach, then the frequency of your recreational marijuana use matters. Someone who takes a hit at a party every few months presents a different risk than someone who smokes daily.
The underwriter follows the insurance company’s internal guidelines to come up with decision on whether they can insure someone, and at what cost.
Underwriters also look for “comorbidities,” or risky choices that can go along with marijuana use. If you also use tobacco, or you’re a heavier drinker than average, that adds to your risk profile. One approach some insurance providers take is to follow the same guidelines they would for a tobacco smoker.
That is, tobacco and marijuana users might get the same or similar “smoker’s rate” on a policy. Some providers may even offer standard or preferred rates (meaning, not smoker’s rates) if your pot use is considered minimal.
Marijuana use is an extra flag for underwriters to the extent it might have bearing on how law-abiding your lifestyle is, too.
“Do we have someone who’s just using marijuana?” Moser asks. “Or do they have a past history of solicitation? If they’re dealing drugs, that’s a huge risk—you could get shot!” Risky lifestyle choices, legal or not (think skydiving or DUI convictions), can lead to higher insurance premiums or even being denied coverage.
That said, using marijuana illegally isn’t necessarily an automatic rejection trigger. That may have been true years ago, but less so these days.
Moser says that another misconception is that admitting to marijuana use will land you in legal hot water. Underwriters don’t call the police if they get an application admitting to illicit drug use (or drinking and driving, for that matter).
They’re not interested in judging character. Any information you’re providing is there to help the insurance company weigh the risks in your lifestyle and come up with the best rate they can.
Of course, no one can predict the future for certain. Moser is interested to see what long-term clinical studies reveal about the safety or risk of marijuana use. Depending on what researchers uncover and how laws continue to change, it may get much easier or more difficult for people who use marijuana to get the lowest rates on a life insurance policy.
As someone who’s witnessed so many changes in her career, Moser is fascinated by several developments.
Selective breeding and other factors have led to more potent marijuana over the last 20 years. “What scares me a little bit is there are chemicals being added to certain marijuana products, where in the 70s this wasn’t done,” Moser says. “The concentration of THC in products baffles me a little bit.”
On the medical side, a major positive has been research that has found that marijuana can have significant benefits for serious conditions, including some seizure disorders in young children.
Legislation permitting marijuana as medicine, and insurance companies that recognize the benefits of the drug, have helped families feel more secure as they navigate a frightening medical situation.
There’s no way to guarantee a particular rate or even approval of coverage without knowing your situation. But if your marijuana use is holding you back from shopping for life insurance, don’t let assumptions get in the way of your seeking coverage. There may be more flexibility in the life insurance industry than you expected.
Fabric exists to help young families master their money. Our articles abide by strict editorial standards.
This article is meant to provide general information and not to provide any specific legal advice or to serve as the basis for any decisions.
Fabric isn’t a law firm and we aren’t licensed to practice law or to provide any legal advice. If you do need legal advice for your specific situation, you should consult with a licensed attorney and/or tax professional.
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