Life Insurance For Pot Smokers
By James Tobin, CFP®
Expert Review Of Life Insurance For Pot Smokers
Whether or not you use marijuana for medicinal or recreational purposes, there is a strong chance you work or socialize with someone who does.
The combination of a changing political landscape and emerging medical science is having an unmistakable affect on how marijuana is viewed by life society.
Life insurance underwriters are in the same boat. The changes are, varied to be sure, but undeniable nonetheless.
The purpose of this article is to provide the information necessary to get the best possible deal on life insurance for a pot smoker.
If you know what information you are looking for, you can use the quick navigation tool to save time.
Changes in Legality
Now legal for recreational use in a handful of states, marijuana is now legal for medical use in about half the states in the union. This has an impact on underwriting simply because it is a reflection of the applicants judgement with regard to following the law.
Because marijuana legislation is subject to the changing political landscape, it is unclear how the Federal government will interpret and enforce the legislation currently on the books.
However, it's fair to guess that the life insurance carriers will be leery of defying the government that has the power to regulate them as financial institutions.
But, It Means You're Seen as a Smoker, Right?
Not necessarily, getting a good rate on life insurance with marijuana use is like nearly all health conditions, different carriers have different risk appetites.
Some carriers will still reject a applicant for acknowledging use, others will simply label you a smoker depending on the frequency of use.
If use is infrequent enough, some carriers will see you as a non-smoker and have preferred rates available.
If I tell the truth, do I have to tell the whole truth?
Didn't your parents tell you to tell the truth?
Of course they did, and probably told you there would be consequences if you didn't.
Well with life insurance carriers the consequences are that if you lie and get caught by the blood or urine test (or medical records), you will likely get declined as underwriters frown more on lying than pot smoking.
The consequence goes beyond simply being declined for the policy: the information will be sent to the medical information bureau (MIB), and be available to any other insurer with whom you apply.
So tell the truth or be damn sure that you are clean.
What will it do to my rates if I am a pot smoker?
That will all depend on the carrier you choose and how often you smoke.
As stated above, some carriers will consider you for the best rates available if you are in excellent health and your cannabis use is infrequent enough. While others will consider you a smoker for any use.
What if I have a Prescription?
With certain carriers having a prescription for your marijuana us may have a benefit. However, the medicinal use explanation is a double edged sword. Because it opens up the underlying medical concern to underwriting scrutiny.
That being said, your story always matters with underwriting. Explaining your marijuana use in the best (truthful) light is important. If you fail to do so, underwriting will draw it's own less charitable conclusions.
Why you Should Use an Independent Agent when Shopping to get Life Insurance Approved as a Pot Smoker
Now you already understand that your story matters, and that two people in similar situations can get very different offers from the same carrier.
What you might not know is that different insurance companies will also treat each case differently.
For example Banner Life may have more of an appetite for the risk that marijuana use presents than say Mutual of Omaha. In this case the underwriting grade will reflect this increased appetite.
So, if your Agent only represented one carrier and you found out later that that you could have gotten a rate 40% or 50% better, how would you feel?
You'd probably be mad either at the agent or yourself or both. So it's important that your Agent represent multiple carriers.
A good independent agent will have access to over 50 carriers. This ensures the best chance at a good rate.
Note that if he doesn't, he probably will not be in a hurry to let you in on this information.
Case Study Pricing Life Insurance Approved as a Pot Smoker
So, I have been preaching about the importance of using an independent Agent and you may think that sounds a little self serving coming from an independent agent.
You are right, it is. However, it is also the undeniable ( and provable) truth.
Please see the case study below . it will show why it is in your interest to have as many options as possible available when shopping for life insurance with marijuana use or any health impairment.
Gender: Female Age: 39
$400000 20 Year Term
2X/month marijuana user - No health concerns
This looks like a best case scenario that would be either preferred or standard non-smoker depending on the insurers appetite for a marijuana use risk.. Let's take a look at the rates.
This table which shows only a few of the major life insurance companies available illustrates the difference in rates. For standard rates Lincoln is almost 40% less expensive than TransAmerica
On it's face this seems like a pretty straightforward choice and if underwriting grades between carriers is the same, it really can be that simple. This kind of easy price shopping is particularly useful for younger folks in good health and demonstrates why you want to use an independent Agent.
As it turns out the obvious choice was the right choice because the underwriting guidelines at Lincoln for marijuana use worked for her situation.
However, if she smoked 2 time a week instead of 2 times a month it would be very different.
Because life insurers manage their appetite for specific risks by being more lenient or more stringent with underwriting grades, you need to know which company will grade you a preferred or standard risk and which ones will grade you as a smoker.
In the case above if the client is viewed as a smoker, Lincoln goes from first to worst and TransAmerica goes from worst to first.
Your Next Step
Now that you know the information you will need to receive the most accurate quote possible, it's time to gather the information and speak to an independent Agent (raising my hand). Simply give us a call or shoot an email over and we can get you started. We are committed to totally transparent pricing (we'll even share our computer screen with you if you'd like), and making the application process as painless as possible.
If you have any questions, We'd like to hear them.