How Does Marijuana Use Affect Life Insurance Rates?

Well, considering that over half of Americans support the legalization of marijuana, 33 states have OK’ed medicinal use, 10 states have legalized both medicinal and recreational use, and 13 additional states have decriminalized it, you’d think you’d be able to find affordable life insurance if you used marijuana, right? Well, you’d be correct!

In recent years, the life insurance industry has been tweaking their views on marijuana use. However, a big challenge for them is the fact that there have not been enough studies done on the effects of marijuana use long term. And studying the effects certain factors have on a person’s life expectancy is what life insurance is all about. This is the main reason that not all life insurance companies welcome applicants who use marijuana with open arms.

But don’t worry, not all life insurance companies underwrite applicants in the same way. When we say underwrite this is when someone at the life insurance company reviews your application, health records, and medical exam results to determine how much of a risk you would be for them to insure. You are then placed in a risk class. Your risk class determines how much you’ll have to pay for life insurance coverage.

If you don’t use tobacco or nicotine products, you can be placed in the non-tobacco risk classes. If you do use these products, you usually get a tobacco risk class.

If the risk to insure you is higher than the risk of an average person, you’ll be table rated. Being table rated means you’ll need to pay an extra percentage on top of the standard pricing to balance the risk the insurance company’s taking to insure you.

Currently how insurance companies view the risk of marijuana use is all over the map. Some will decline you if you use and some don’t care at all.

If you use marijuana, whether medicinally or recreationally, working with an independent broker is going to be your best chance of getting approved at affordable prices because they have contracts with multiple life insurance companies.

» Compare: Term life insurance quotes

At Quotacy.com you can see term life insurance quotes instantly without having to give any contact information. And when you’re ready to apply, choose from one of our many top-rated insurance carriers. On your application, if you use marijuana or THC, you’ll be asked how frequently use it, the main purpose of your use, how you consume it, and the last time you used.

And based on this information if the insurance company you chose online during the application process is likely to increase your rate because of your usage, your Quotacy agent will reach out to you and suggest switching you to an alternate insurance company. This is just a suggestion though and the final decision is completely up to you.

If you would prefer to take your chances with your original carrier of choice your agent will help you out every step of the way. And if you want to switch to the alternate insurance carrier, don’t worry, your agent will do the paperwork behind the scenes and still keep you updated every step of the way.

If you use marijuana, working with a broker versus going direct with an insurance company is going to be a huge benefit to you simply because of the insurance companies’ varying degrees of how they treat marijuana use.

Let’s look at an example to really show how the insurance company you go with can affect the price you pay.

Life Insurance and Recreational Marijuana Use Example

Will Nelson is a 35-year-old male who lives in Washington State where both medicinal and recreational marijuana use is legal. He smokes marijuana recreationally usually every evening after he gets home from work. He is applying for a 20-year term life insurance policy with $250,000 in coverage.

Insurance Company A won’t even offer him coverage. They view using marijuana more than 4 times per week to be just too much risk.

Insurance Company B will offer him coverage but they categorize smoking marijuana to be in the same risk class as smoking cigarettes. They would table rate Will as Tobacco Table B making his premiums approximately $100 each month.

Insurance Company C views marijuana use as low risk and does not even consider it to be in the same category as cigarette use. They offer him Standard Non-Tobacco and Will’s policy premiums would only be approximately $28 per month.

Imagine if instead of working with a broker, Will went directly to Insurance Company A. He would have been declined for life insurance and his family left unprotected. Or imagine he just went directly to Insurance Company B. He’d be losing out on saving over $70 per month.

» Calculate: Life insurance needs calculator

Everyone’s situation is different and you may pay more or less than Will but if you use marijuana don’t be afraid to apply for life insurance. Here at Quotacy we work with clients on a daily basis that use marijuana for both medicinal and recreational purposes and we’re ready to help you financially protect your family with life insurance.

If you have any questions about life insurance, make sure to leave us a comment. Otherwise, tune in next week when we talk about how life insurance helps small business owners. Bye!