Marijuana Use and Life Insurance: Can Cannabis Keep You From Getting Coverage?

marijuana cocktail drink

Photo by Justin Aikin on Unsplash

America’s views on marijuana (or cannabis, as it’s commonly referred to these days) have come a long way. Just 30 years ago, only 24% of Americans were in favor of legalization. Today 66% support legalizing marijuana. The times, they are a-changin’.

While the federal government shows no signs of legalizing marijuana anytime soon, more states will likely continue to legalize weed in some form or another. The insurance industry has noticed. How could they not when an estimated 13% of Americans use or smoke marijuana? Insurance companies are monitoring how legal marijuana is impacting everything from auto insurance to workers’ compensation. 

But is the life insurance industry following along, too? You might be surprised to learn that there are companies that do offer coverage to people who smoke or use marijuana products. 

Can you get life insurance if you smoke or use marijuana?

Marijuana and life insurance can get along. It depends on where you live, why you’re using it, and how often.

Even though most states have enacted some laws legalizing marijuana in some form, federally it is still illegal and classified as a Schedule I drug. This is the highest of five federal classifications of drugs based on their acceptable medical use and supposed potential for abuse or dependency. According to the DEA, “Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse.” Heroin, LSD, ecstasy, methaqualone, and peyote are also on this list. 

Possessing marijuana is also a federal offense that can result in a misdemeanor, $1,000 fine, and a mandatory minimum sentence of one year. Or much worse. The penalties vary depending on the offense, amount, and whether you’re cultivating or selling it. And that’s just federal. A number of states still have very strict laws. For example, in Arizona, possession of any amount of marijuana is a felony.

Disclosing marijuana use to your insurance company won’t land you in jail. Your underwriter isn’t going to rat you out. They already have enough paperwork to deal with! (That’s probably partly true, but I’m sure getting prospective customers jail time wouldn’t be good for business either.) They honestly just want to want to get a holistic view of you as a person.

They’ll need to know the following information in order to determine how risky you are to insure and if they can offer you a life insurance policy at all.

  • Where do you live? Do you live in a state where marijuana is legalized? 
  • Why are you using marijuana? Is this for recreation or medical purposes?
  • How often are you using marijuana? Are you using it a couple of times a month, or are you waking and baking?

The answers to these questions can drastically change your eligibility or rates.

How do insurance companies view medical marijuana?

Medical marijuana does wonders for the thousands of people who use it to treat a variety of conditions. When applying for life insurance, underwriting may be more concerned with the underlying medical condition requiring the marijuana treatment than the prescription itself.

Having a prescription for medical marijuana can be an indicator that something more serious is going on with your health. A 2015 marijuana whitepaper from Munich RE (one of the largest reinsurers in the world) provides more insight into why. Risk Management Consultant Gary Haddow writes, “the reason it is being prescribed must be identified and the mortality and/or morbidity implications related to that impairment understood, as the risk may be uninsurable at the outset.” 

In other words, based on your health, what is your life expectancy? What are the chances that you’ll die soon? If you don’t meet underwriting guidelines because of a high-risk condition (like cancer or heart disease), a medical marijuana prescription won’t make any difference. The insurance company will also look for signs of potential abuse, like seeing multiple doctors, refilling too frequently, whether you also use marijuana or other drugs recreationally, and more. 

But ultimately, it depends on how comfortable the insurance company is in taking that risk to offer you life insurance. Haddow continues, “If all the factors are favorable and the underlying impairment can be priced appropriately, according to your guidelines, then an offer is warranted.” 

Rating ClassLevel of RiskPolicy Premium
PreferredLowLeast Expensive
StandardAverageAverage
Sub-standardHighMost Expensive

 

If you’re a medical marijuana user in good health, you may still qualify for Preferred insurance rates. For example, here are the medical marijuana underwriting guidelines for two life insurance companies QuickQuote works with:

American General Life – Underwriting Guidelines for Medical Marijuana Users
Medical – Use Based on PrescriptionCould qualify for Preferred rating. The decision will be based on medical history requiring the marijuana prescription.

 

Prudential Life – Underwriting Guidelines for Medical Marijuana Users
Medical – Use Based on PrescriptionCould qualify for Preferred rating presuming marijuana is used as prescribed and if otherwise qualified for coverage

 

How do insurance companies rate recreational marijuana use? 

Similarly to medical marijuana use, the insurance company will want to know more about your recreational habits. Some allow limited use. Of those that do allow it, you may or may not be rated as a tobacco user — paying on average 215% more than nonsmokers.

The underwriter will want to know more about the frequency, quantity, how you’re using it, and whether this is a sign of high risk. Are there signs of abusing alcohol or other drugs? Are there concerning things about your lifestyle? “If abuse or multiple hazards associated with marijuana use are identified, the risk will likely be unacceptable,” says Haddow.

If you’re an infrequent recreational marijuana user in good health, you may qualify for the best insurance rates, depending on the frequency of use. Not all life insurance companies publish their underwriting guidelines for recreational use, but we’ve found these general guidelines are used by several companies:

Company A – Underwriting Guidelines for Recreational Marijuana Users
Up to 2 times per yearBest rating class if otherwise qualified
Up to 2 times per monthStandard Non-Tobacco rating is possible
More than 2 times per monthTobacco rating, and may be rated Table B* or higher

*Table B is a substandard rating class.

 

Company B – Underwriting Guidelines for Recreational Marijuana Users
Up to 4 times per monthPreferred Non-Tobacco rating is possible
5 – 11 times per monthStandard Non-Tobacco rating is possible
12 – 16 times per monthStandard Tobacco rating is possible
Daily useWill be a Decline

 

Company C – Underwriting Guidelines for Recreational Marijuana Users
Up to 1 time per monthPreferred Plus Non-Tobacco rating is possible
Up to 2 times per monthPreferred Non-Tobacco rating is possible
Up to 3 times per week or 12 per monthStandard Non-Tobacco rating is possible
Daily useWill be a Decline

 

Do you need to tell your insurance company about your marijuana use?

Don’t lie on your application. If caught, the consequences can be severe for your beneficiaries — they could find themselves without a death benefit should the claim on your policy be denied based on this omitted information.

You won’t get into any legal trouble for disclosing your marijuana use on your life insurance application. It’s in your best interest to be honest with your life insurance agent, and you can ask questions before you even start the application. 

If you don’t mention that you’re a marijuana user, insurance companies have other ways of finding out. Your insurance company may require a drug test as part of your medical exam. If you’ve been prescribed medical marijuana, it may show up in your medical or prescription records, even if you go the no-exam route. Your physician may note it in a statement. 

Bottom Line

It can be intimidating to look for life insurance if you partake in this illicit activity. But if you’re easy on the weed and in good health, you’ll likely have some options available. Don’t let fear keep you from applying for life insurance.

 

Annette Salinas

Annette Salinas is a content strategist and writer based in Austin, TX. She began her career as a call center representative at an insurance company, advising and educating customers. Today, she's a writer and editor specializing in insurance and personal finance.

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