If you are a marijuana smoker and curious or concerned how revealing it might affect your ability to purchase life insurance or the affect on your rates, these FAQs can provide answers to many of the questions you’re likely to have.
Although marijuana smoking remains illegal under federal law, more than 50 percent of states in the U.S. have legalized its use in some form. Seven states have also legalized its recreational use, and expectations are that the list will continue to grow over the next five years. Purchasing life insurance can be confusing, especially finding the right company that will offer the most affordable rates. Here are some FAQs that will assist in your success.
Will I qualify for Life Insurance if I smoke marijuana?
In most cases, yes. The majority of life insurance companies does not consider marijuana to be a hard-core drug like Cocaine, Heroin, or Methamphetamine. Many will accept recreational marijuana use just as they do tobacco use and offer a smoker rating. Just as America has become liberalized about marijuana use, so have many insurance carriers.
Will I automatically be rated as a smoker?
Looking back over the last decade, marijuana smokers were assigned smoker rates because the insurers considered smoking marijuana the same as smoking cigarettes or cigars. Recently, however, many insurance companies have begun to offer non-smoker rates for marijuana smokers who limit their use and do not smoke tobacco products. Each company has different underwriting guidelines regarding marijuana use, but competition in the marketplace has forced them to take a more liberal view regarding smoker versus non-smoker classifications.
Can the Insurance Company report my marijuana use to law enforcement?
HIPPA laws forbid your insurance company and the agent from sharing any personal information, any application information, and any test results with any third party including law enforcement and employers. Insurance companies are in business to sell insurance, not to snitch on their clients or prospective clients.
Would it be okay to just lie about my marijuana use?
It is a huge mistake to consider lying about anything on your insurance application. Your marijuana use would be revealed after your blood and urine samples are tested, and if you had not been honest, your application would be declined. Once you are declined, the decline is entered into the MIB (medical information bureau) database for all other life insurers to see.
Also, life insurance policies have a two-year contestability period, which means if you should die within that time, the insurance company can open a complete investigation into your application. If the investigation reveals that you lied or omitted your marijuana use, the company is likely to deny the claim and not pay your beneficiary.
What if I only use marijuana for medical reasons?
If you claim your marijuana use is for medicinal purposes only, your insurer will then look at the underlying illness or disease that is causing the need for using it. Your insurer would consider your medical marijuana like any other prescribed drug and would require the medical records to show proof that you actually need it to treat symptoms of the illness or disease.
Is a medical exam always required?
In order to get the lowest possible rate, your insurance application will be fully underwritten by the insurer which always results in a medical exam requirement. You can, however, apply to an insurance company that offers no-exam insurance policies or apply to a company that offers “guaranteed issue” policies. In either case, you should expect to pay more for your insurance company since the insurer is accepting a higher risk for not fully underwriting the policy. Even though you will pay a higher rate, these policies are still considered affordable.
If I’m classified as a smoker, how much more will I have to pay?
The difference in rates between a smoker and non-smoker is substantial. For example, a 30-year-old male non-smoker would be quoted about $40 per month for a $500,000, 20-year term policy. If that same person was rated as a smoker, his monthly rate would be about $92 per month for the same coverage and term. The difference is enormous when you consider an additional $52 over 240 payments or $12,480 more for the policy.
Should I go through an agent or buy directly from a company?
Some insurance companies will allow consumers to buy direct, but doing so would be a huge mistake. Listed below are the reasons to use an independent agent:
- You pay the same amount whether you purchase direct or go through an agent.
- Buying direct would require you to call or visit the websites of many different insurance companies to get the best price.
- An experienced and reputable independent agent typically represents more than 100 of the best insurance companies.
- With an independent agent, one completed application is all that is needed.
- An independent agent will help you through the underwriting process and help you get approved as soon as possible.
- Your independent agent will answer all your questions about life insurance and how to get the best rates.
- Your independent agent will put your needs ahead of the needs of the companies they represent. Buying direct means you will go through a company agent who cares about the company first and you last.
Do I have to pay for the medical exam?
If your insurer requires a medical exam and blood/urine tests, they will pay 100% of the cost. They will also send the medical practitioner to your home or workplace and they will make sure their visit remains confidential.
What happens if my medical exam reveals things I was not aware of?
You can have the results of your medical exam delivered to your personal physician or a medical facility of your choice. The application will include a question for gathering this information.