Marijuana and life insurance

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With the U.S. laws around marijuana cultivation and consumption in a state of flux, there are many questions for those who use marijuana. In those states that have legalized it, whether recreational or medical, new norms are developing around life insurance and marijuana. At least 39 states have legalized marijuana in one form or another. Roughly 12% of adult Americans smoke marijuana, according to research done in 2019 by Gallup. According to the Pew Research Center, 91% of Americans favor legalization between medical and recreational options.

With marijuana becoming so common, wondering about life insurance marijuana makes perfect sense. Much like the laws around marijuana, though, insurance company policies are widely varied. Some life insurance companies will refuse marijuana smokers. Others will charge them like a tobacco smoker. There are even those who will mostly ignore marijuana use but focus instead upon any health issues it might reveal.

How marijuana impacts life insurance rates

Insurance companies determine their own rules, for the most part, when it comes to deciding how marijuana use will affect rates. Life insurance companies use a health classification system for policy applicants. There are five tiers to this ranking system: preferred plus, preferred, standard plus, standard and substandard.

The better an applicant’s health and health-related behaviors, the better their health classification will be. This system is one place where the relationship between marijuana and life insurance can get tricky.

Some companies will categorize marijuana users as tobacco users because the label ‘smoker’ already exists within the ranking system. In these situations, premiums can be significantly higher than for a non-smoker. However, other companies use a more nuanced approach to determine how marijuana use impacts applicants’ health. Still, some companies don’t raise rates for marijuana use itself but may do so for any underlying conditions that marijuana is being used to treat.

With legal marijuana still being so new and segmented, there is no standardized approach for life insurance companies. As a result, marijuana consumption will raise premiums in some cases and not in others.

The type of marijuana

The type of marijuana being used—whether medical or recreational—can play a significant role in how life insurance companies look at it. For instance, some companies see recreational use as a warning sign of health risk, while others see medical use as a health risk. The first case is due to the marijuana use itself. In contrast, the second instance has to do with the underlying health problems that marijuana is being used to treat.

The delivery method

How marijuana is consumed can also play a role in how it affects life insurance rates. Depending on the marijuana delivery method—vaping, smoking, edibles, etc.—there can be a range of potential impacts on a life insurance policy. Some people point to smoking as the least healthy consumption method, so they believe that other delivery methods should not cause an equivalent hike in rates. However, these determinations are made by individual companies. As a result, some companies may charge higher rates for people who smoke marijuana than those who vape it or consume it in an edible format, while other companies may make no distinction.

The frequency of use

How often a person uses marijuana can also play a role in how life insurance companies determine rate impacts. Companies may decide less frequent use may be a lower health risk. Inversely, more regular consumption of marijuana may be a higher health risk. Because the determination is up to the life insurance company, the frequency of use will matter with some but not others.

The type of cannabinoid

Another distinction that can come up with life insurance companies is whether the primary cannabinoid is THC or CBD. The first, THC, is what iconifies marijuana as a mind-altering substance. The second, CBD, is mostly toted for anxiety reduction and muscle relaxation. The primary difference between hemp and marijuana is that hemp plants have been bred to create less than 1% THC by volume in their flowers. Unlike marijuana, hemp is federally legal.

While each of these distinctions may be seen as meaningful, it is ultimately up to each life insurance company to decide how they will use and interpret these variables.

How to address marijuana on life insurance applications

When filling out a life insurance application, be honest. Getting caught lying on a life insurance application can be much worse than merely being turned down in the first place.

If your insurer catches you in a lie on your application, the provider will either cancel the policy or raise the rates on it. While legal consequences are unlikely, these instances do count as a type of fraud. Your insurer will also report it to the Medical Information Bureau (MIB), where other insurance companies can see it.

When reporting marijuana use on a life insurance application, there are some crucial factors to include:

  • Frequency of use
  • Quantity of use
  • Medical vs. recreational designation of use
  • Primary method of delivery or use

These variables are some of the ones that a life insurance company will want to consider when reviewing an application.

Take the time to shop around. While not all companies will advertise their marijuana policies, it never hurts to ask before taking the time to apply.

Frequently asked questions

Will marijuana use raise my life insurance premiums?

It depends on the life insurance company. Some companies will refuse policies to marijuana users, others will raise their rates, and some will mostly ignore the use.

What happens if I start using marijuana after I’ve already gotten a life insurance policy?

Within most life insurance policies are a series of warranties (as in promises or statements of truth). Some of these will be signed guarantees that your application information is accurate. In contrast, others may state that you will inform your insurer if you become a smoker. In general, notable changes in health or behaviors that can influence health are things that the insurance company will want to know.

Does it matter what delivery system I use?

Again, this will depend on the insurance company in question. Some life insurance companies may make a distinction about delivery methods, while others do not. Before selecting a life insurance company, shop around to see which policies and regulations best suit your situation.