What Marijuana Use Can Do to Your Life Insurance Premium

Marijuana, Money, Rights

marijuana and life insuranceMarijuana users are enjoying its newfound legal status in several states, but that doesn’t mean that marijuana use is without complications. Life insurance companies vary in how they handle applications and policies of marijuana users. If you’re looking for life insurance and you use marijuana even occasionally, here are some points to consider.

Life insurance companies handle marijuana use differently.

Life insurance companies make money by collecting premiums from policyholders. A policyholder’s premium is determined by what kind of policy they have and whether they are healthy – or, from the life insurance company’s point of view, what kind of risk they are. People with extensive medical histories and bad habits pay higher premiums, if they can be insured at all. The insurance company hopes that the policyholder will pay in to the policy more than they will get out.

Many life insurance companies flat-out deny coverage to marijuana users. Others choose to charge marijuana users higher rates than non-users, even in cases where marijuana is prescribed by a doctor for medical reasons. Some equate it with cigarette smoking, charging twice or even four times the rate of a non-smoker. But a few companies look more favorably on marijuana use, and charge more reasonable premiums depending on the frequency of use, the cutoff being somewhere between once a month and four times a week.

Marijuana use often equated with cigarette smoking.

Is it fair to equate marijuana use to cigarette smoking? Many studies have linked cigarette smoking to lung cancer, throat cancer, emphysema, and more, but the verdict is still out on the negative effects of marijuana. Also, not all users smoke marijuana; many vaporize it or ingest it, two methods believed to be less harmful than smoking.

Not every life insurance company is willing to take the risk, though, and will err on the side of caution until there is a consensus in the medical community on the long-term effects of marijuana on health. Until that time, expect that charging more will be the norm.

Do you have to declare your use on applications?

With the negative impact of declaring oneself a marijuana user on an application for life insurance, you may be tempted to omit that information altogether, especially if use is infrequent. Bad idea. Marijuana use of any kind, whether smoked, vaporized, or ingested, puts the active ingredient, tetrahydrocannabinol (THC) in your system. It can stay in your system for weeks after a single use, and its metabolites can be detected in saliva, blood, hair, and urine tests.

This matters because if you didn’t disclose your habit and your life insurance company finds out that you were a user, it has the right to cancel your policy or deny your claim. It can also make it more difficult for you to get another policy in the future, if you’ve had a policy denied for non-disclosure.

What if you live in a state where it’s still illegal? HIPPA laws protect this information, so you don’t have to worry about being turned in to the authorities. Go ahead and disclose it.

Marijuana users should shop around for life insurance.

Marijuana users should take extra time in shopping around for a life insurance policy. It’s a good idea to work with independent brokers, who can offer a variety of policies from different companies. And remember to be completely honest on your application.