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The Buzz on Marijuana and Life Insurance

It’s no surprise that lifestyle matters when it comes to life insurance. Diet, mental and physical health, family medical history, age, gender, and occupation—these are all common factors that impact life insurance rates. What happens when you add marijuana use to the mix? The purpose, the frequency and several other factors related to marijuana use matter more than marijuana itself when it comes to the cost of getting life insurance coverage.

To Tell the Truth

As far as life insurance applications go, honesty is truly the best policy. Life insurance policies are legal contracts between insurers and the insured. As a result, when you complete a life insurance application, it is necessary for it to be not only accurate, but full and complete. Non-disclosure of medical conditions and aspects of your lifestyle can result in rejected claims during the contestable period, which essentially means that someone could pay their policy consistently for months or even years, only to learn that the money will not be available to their family when it matters most.
While it may be tempting to conceal marijuana use, don’t. Life insurance applications are protected under HIPPA (Health Insurance Portability and Accountability Act), which means marijuana use and anything else disclosed on an application cannot be shared with third parties. Furthermore, marijuana is one of the most popular recreational drugs in the United States. With efforts to decriminalize and legalize the drug gaining momentum across the United States, people are speaking more openly about marijuana use.
As of January 1, 2018, California became the sixth state to allow anyone over the age of 21 to purchase marijuana from licensed shops. Additionally, experts estimate several other states will legalize marijuana this year. Certainly with these changes in legal guidelines, the taboo surrounding its use is fading. In short, if you use it, disclose it.

The Big Picture

It is true that the majority of insurance companies factor marijuana use (from smoking and oils to edibles and vaporization) into their life insurance decisions. But what may surprise you is how significant or insignificant the impact may be on your rates. In fact, nearly 30 percent of companies said some users could still qualify as nonsmokers, in turn allowing them to be eligible for the best rates. The devil—or, in this case, the rate quote—is in the details.

  • Purpose: First, it is important to distinguish between medical use and recreational use. If you use marijuana for medical reasons, you will disclose that as you would any other prescription. Then, the insurance company will consider the underlying health reason that made the marijuana necessary by reviewing your medical history and possibly requiring a medical exam. Some medical marijuana users may have conditions such as migraines or arthritis, while others may suffer from cancer or AIDS. Regardless, it is the health condition itself that will have more of an impact on rates than the marijuana use when it comes to medical marijuana.
  • Frequency: In regards to recreational marijuana use, how often you use marijuana matters. Essentially, the frequency determines your rates. The frequency determines whether or not you are classified as a smoker or nonsmoker. The frequency threshold is specific to each insurance company, with some allowing weekly use and others only allowing monthly use to qualify for the lower nonsmoker rates. When shopping for life insurance quotes, inquiring about these details is key.  
  • Other Factors: In addition to looking at the purpose and frequency of marijuana use, insurance companies will consider other factors. Insurance companies will look at whether or not applicants smoke cigarettes or consume alcohol. The frequency, the amount and the number of recreational drugs—alcohol, cigarettes or marijuana—consumed matter. Additionally, insurance companies will also consider the ways in which marijuana may impact someone’s criminal record. Applications inquire about motor vehicle infractions like DUI/DWI and suspended driver’s licenses, as well as misdemeanor and felony charges. The latter being especially significant since laws surrounding marijuana use vary widely. Individuals who not only use marijuana but are associated with the business of it will likely be declined.  

Currently, the type of user, the frequency of use, and related factors like cigarette use, alcohol use, and criminal records, are the driving factors impacting life insurance rates of marijuana users. With the culture and laws surrounding marijuana use in constant flux in the United States, it is likely that the ways in which marijuana use impacts life insurance rates will continue to evolve. Regardless, it is important to remember marijuana use does not mean your chance at life insurance will go up in smoke.
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