Marijuana Friendly Life Insurance Companies – What You Need to Know

Did you know a recent Forbes survey found that 56% of people would lie about their marijuana use to get cheaper life insurance rates?

You don’t need to lie. Today, many top-rated life insurance companies offer great rates to marijuana users, whether for medical or recreational use.

Here’s what you need to know to get the best coverage without hiding your marijuana use.

Medical marijuana is legal in 37 states, four territories, and Washington, D.C., and life insurance companies have adapted.

If you’re using medical marijuana, insurers typically focus more on your underlying medical condition rather than the marijuana itself. It does not affect life insurance unless you vape medical marijuana.

• Forms of marijuana (edibles, tinctures, gummies): Usually qualify for non-tobacco rates
• Smoking marijuana: Non-tobacco rates are available.
• Vaping marijuana: Some companies like Prudential and Symetra give non-tobacco rates for dry herb vaping, but oil/concentrate vaping gets tobacco rates in most cases.

All types of life insurance, including term, universal life, and whole life insurance policies, are available.

Here’s what Prudential says about medicinal marijuana.

When prescribed by, or taken under the direction of, a physician, any rating assessed will generally be based on the underlying condition, not the actual use of the medicinal marijuana.

Rx for Success – Marijuana – Prudential 08/2021

A positive THC level for medical marijuana use is acceptable with life insurance companies.

Important Tip: Always disclose medical marijuana use on your application. Companies verify prescriptions and medical records, and honesty ensures smoother underwriting. If you have a positive lab test but didn’t disclose it, it’s very hard to correct.

When you complete your application and paramed exam, you’ll be asked about your prescriptions and medical conditions.

If you have a medical marijuana card, indicate that with your application. Life insurers may ask for a copy of your marijuana card or request medical records related to the prescription.

The underwriter will also base your price on whatever medical condition you have.

What happens when you don’t disclose your medical marijuana prescription?

You may get declined before you even get the chance to explain your situation. Chances are that you will be caught from a positive THC lab result, notes in your physician’s medical records, or information in prescription databases.

There’s no need to hide medical marijuana use as it does not impact your application unless it is vaped. In that situation, we must work with a few specific carriers, as some will consider you a smoker.

Recreational marijuana is legal in 17 states, Washington D.C., and Guam. The good news? It has minimal impact on your life insurance rates—if you follow these three key steps:

1. Be honest about usage on the application.
2. Indicate frequency of use.
3. Stop using long enough to provide a negative test result.

The best companies don’t care that you use marijuana, but you have to have a negative lab result. Otherwise, tobacco rates will apply with most companies.

Let us know if you use other forms of tobacco, such as cigars, chewing tobacco, or pipe tobacco, as we may still have non-smoker rates available. If you smoke cigarettes, smoker rates apply.

If you are considering the Costco Life or the AICPA life insurance programs, don’t, as you will be disappointed with the outcome.

Your frequency of marijuana use directly affects your insurance rates. Here’s how it breaks down:

• Occasional Users (a few times per year) – The best non-tobacco life insurance rates are available.
• Monthly Users (Up to 8x per month) – Preferred Plus rates available with Corebridge Financial.
• Weekly Users – Preferred and Standard rates available with negative THC test.
• Daily Users – Most insurers want negative labs.

The underwriting rules become more involved for daily users. Companies will ask for a full drug history questionnaire, and most offers you receive will include a table rating that adds 50-100% to a standard rate.

We’ll tell you exactly what to expect with each life insurance company’s quotes.

Insurance companies typically test urine for THC. Here’s a general guideline for detection periods:

• Frequency of marijuana use
• Concentration levels of THC in the marijuana you use
• Your body weight and fat – THC is stored in fat
• How you consume marijuana – smoke vs. edibles, etc.

Approximate timeframes for marijuana in your system:

• Single-use: 3 – 4 days
• Moderate Use: 4x per week – 5 – 7 days
• Daily use: 10 – 15 days
• Heavy chronic use: 30+ days

Plan accordingly to provide a negative lab test result if required by your insurer.

Never lie about your marijuana use on a life insurance application. Consequences can include:

• Underwriting Denial – Companies will decline your application if they learn about marijuana use.
• Contested Policy – Companies have 2 years after you buy the policy to contest it.
• Insurance Fraud – You may be committing a crime, although I know of no arrests in 25+ years.
• Claim Denial – Your beneficiary may fight the company to get paid.

There may be severe consequences for the applicant and beneficiaries trying to claim life insurance proceeds.

It’s not worth it, especially since you can get affordable life insurance when you disclose marijuana use.

Remember that if your application has been declined, the Medical Information Bureau will have records of your prior application history in their files.

Life insurance is more challenging if you’re employed in the marijuana industry, including:

• Growers, cultivators, and trimmers
• Retail workers and dispensary managers
• Lab technicians and extraction specialists

Federal laws restrict banks and insurers from working directly with marijuana-derived funds, making traditional life insurance challenging. However, alternative coverage is available:

• Accidental Death Insurance: Coverage up to 10x your annual income.
• Specialized Business Coverage: Policies (up to $25 million) specifically for marijuana business owners are available through a Lloyd’s of London program.

As legislation evolves, we expect more traditional insurance options to become available.

Getting life insurance if you use marijuana is simple with the right approach:

• Be truthful about your marijuana use.
• Understand the impact of frequency and method of use.
• Choose a marijuana-friendly life insurance company.

Ready to get started? Get a free quote today, and we’ll help you secure affordable, marijuana-friendly life insurance.

Sources

[1] National Conference of State Legislatures – https://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx – reviewed 5-7-2022

[2] Centers for Disease Control and Prevention – https://www.cdc.gov/marijuana/index.htm – reviewed 5-7-2022

[3] U.S. News & World Report – https://www.usnews.com/news/best-states/articles/where-is-marijuana-legal-a-guide-to-marijuana-legalization – reviewed 5-7-2022