The life insurance industry is rarely seen as a dynamic one, yet marijuana is forcing the hands of many of the best life insurance companies in the country to take a second look at their underwriting guidelines. In years past, any use of marijuana meant smoker premiums, but this is no longer the case.
Several carriers now offer non-smoker rates for those who use marijuana, recreationally or medicinally. Let’s discuss it.
Impacts of Marijuana Use and Life Insurance
Your use of marijuana may have a range of impacts on your final life insurance rate, dependent on several factors. Because of this, you’ll need to understand the different factors and relate them to your own situation. This enables you to apply to the company who will be best fit for your individual case.
Some of these factors are:
- Frequency of Use
- Date of Last Use
- Recreational vs. Medicinal Use
Independently, none of these provide enough information for any one carrier to make a decision on your risk profile attributed directly from marijuana use. However, the data received from your responses from all three will give your underwriter exactly what they need to know.
However, one of the first questions we get when helping someone buy life insurance as a marijuana user is the question:
Won’t I get in trouble if I disclose my use of marijuana if it’s not legal here?
And it’s a great question. Nobody wants to get in any trouble just for trying to protect their family or business. Fortunately, the answer is no. Due to HIPAA laws, your health information is secure and cannot be passed to another entity. Marijuana use is not exempt from HIPAA laws, so you’re safe in passing this information.
In fact, you HAVE to disclose your use up front when applying, per carrier regulations. If you fail to admit your use, yet traces are found in your blood, you’re too late and will get approved at smoker rates, at best.
Frequency of Use
How often you smoke, vape or consume marijuana is crucial. A once in a lifetime user compared to a daily user will have a completely different experience in their purchase, with vast variances in availability for top rates. But this is fairly obvious.
It’s the middle ground users who find themselves in the more difficult situations. These are the people who use on random occasions, to those with use on specific intervals for medicinal purposes in a reactive scenario. In the end, it could amount to anything from once a week to once a year, or less.
For life insurance, less marijuana use will yield more opportunities for non-smoker rates. We’ll get to the exact amounts below.
Date of Last Use
This isn’t a major factor, but is something to consider in two different ways.
- The closer the date of last use to your exam date, the higher chance of seeing traces in your medical exam.
- The closer the date of last use to your application date, the higher suspicion an underwriter may have of high frequency of use.
In the first scenario, your last use of marijuana could directly impact your life insurance blood test if marijuana is found. The further away the date, the less, if any, will be spotted. It’s important to know this because there are acceptable levels where a non-smoker rate can still be considered, and levels where it would result in smoker ratings regardless of other factors.
In the second scenario, it could raise flags with the underwriter if someone were to exclaim, “Well I only used it for the first time ever last month.” While you may be thinking you’re just a one-time user, it wouldn’t be out of the question for the underwriter to see the possibility you may use again. If, however, you’re a 45 year old and you used it once in college when you were 20, it’d be a different story.
Recreational vs. Medicinal Use
Your purpose in using won’t matter so much to differentiate smokers versus non-smokers as much as healthy versus not healthy. Health is one of the key underwriting factors, and a prescription for use is a sure indication of health concerns.
A person who uses recreationally will likely only be scored on their frequency and date of last use.
A person who uses medicinally, however, will be subject to additional underwriting questions as if they were a high risk life insurance candidate. This is because many of them are. Those who use cannabis as a medicine who are issued a prescription suffer from a very wide range of symptoms and conditions for which the marijuana is treating. It is these symptoms and conditions raising the red flags, not just the marijuana use.
Understand this won’t always impact rates, but simply makes it much more likely.
The Risks Of Marijuana Associated With Underwriting
Many marijuana users are beginning to question why marijuana impacts life insurance in the first place, especially considering the decriminalization our country is going through. There are really a couple different reasons, but remember the focus for an insurance carrier is longevity of life. Anything which impacts life expectancy of an individual, whether direct or indirect, must be considered.
Legality Is Not A Concern
Marijuana is classified as a Schedule 1 drug according to the DEA, just like heroin, ecstasy and LSD. However, the legality of the drug isn’t the reason marijuana is considered differently by underwriting standards. It’s the contents of the drug and it’s effect on the human body which is the catalyst for rating changes. (Note: Several states are calling for the reclassification of marijuana at the federal level.)
Tetrahydrocannabinol, which typically is just shortened to THC, is a key psychoactive ingredient in cannabis where long term use may effect life expectancy, albeit indirectly. There hasn’t ever been a death recorded strictly due to the use of marijuana, however it has been shown to increase the risk of heart disease, and obvious concern for a life insurer.
Other possible long term effects of heavy use are:
- Cardiac Abnormalities
- Cerebral Changes
While these are far from the average, they must still be taken into account. This is just one of the many different compounds within the vast strains of cannabis which are being researched more than ever.
Consider this analogy: alcohol use is not illegal, but extensive use or abuse can lead to harsh underwriting considerations. While alcohol and marijuana are on either end of the legality spectrum, they are both underwritten in somewhat similar fashions because of their medical effects on the human body. To emphasize, legality is not the issue, but rather the long term effects of continued use.
Where You Should Apply
As stated before, the company you apply to makes all the difference in what rate you’ll get, which is what determines your premiums. Obviously, the goal is find the company which will benefit you the most, depending on your type of use, frequency, and overall health profile.
The following is an up-to-date chart of the companies who are more relaxed in their views on marijuana use and life insurance approvals, subject to change:
|Carrier||Best Class||Max Use|
|American General||Preferred Best||2x annually|
|Banner||Standard Smoker||Recreational, negative test|
|Columbus Life||Standard Smoker||Recreational, negative test|
|Genworth||Standard Smoker||8x monthly|
|ING Reliastar||Preferred Smoker||Daily|
|Lincoln||Standard Non-Smoker||8x monthly|
|MetLife||Preferred Plus||4x monthly|
|Mutual of Omaha||Standard Non-Smoker||4x monthly, negative test|
|Minnesota Life||Preferred Non-Smoker||Recreational, negative test|
|North American||Standard Smoker||8x monthly|
|Prudential||Standard Plus||2x monthly, negative test|
There are other restrictions in many cases, including age, number of uses per year (as opposed to monthly), and whether or not your use is recreational or medicinal in nature. Some carriers do not allow medicinal use whatsoever due to the lack of beneficial research on the subject.
Refer to an independent agent where needed.
UPDATE — June, 2015: A Munich American Reassurance Company study on Marijuana finds nearly a third of companies now find users to be non-smokers.