The amount of misinformation floating around the internet about life insurance and marijuana use shocked us. When people call us with insurance questions, they tend to have the same reactions upon discovering baseless worries spread by rumor or old information.
People (when they do reach out to us) are afraid their boss will find out, they’ll be automatically declined for a policy, or any policy that will cover them will just be too darned expensive. These are just three of the biggest falsehoods we see every day.
And those are just from the people who reach out and ask. There is also an understandable nervousness about telling anyone (including your doctor or insurance agent) which prevents people from reaching out at all.
The Worst Part About Misinformation on Life Insurance and Marijuana Use
Worries prevent people from taking action on something potentially beneficial. When you have someone choose between life insurance and a hobby or medication, hobbies and medication will win every time. That leaves millions of families financially vulnerable because of rightful worries on bad information. Worse, people will lie on a life insurance application and their families will get nothing when the insurance company discovers the fraud.
To combat this damaging information, we put together a list of the most common mistaken beliefs about life insurance and marijuana use. Then we tear them apart because as much as we hope you’ll take our word for it, it’s essential to verify the information for yourself.
Here are the most common reasons why people who smoke cannabis either recreationally or medically don’t buy life insurance:
- You can’t buy life insurance at all if you smoke cannabis
- Government authorities, a boss, or a spouse will find out about the marijuana use
- You will pay more for life insurance in states where marijuana is still under prohibition
- People who smoke cannabis will pay tobacco rates
- Life insurance for marijuana users is more expensive
- Every marijuana user gets tested for THC
- Cannabis smokers cannot build wealth with life insurance
- Insurance companies treat recreational smokers and medical marijuana card holders the same
- Marijuana business owners cannot buy life insurance
- It’s impossible to get affordable life insurance when you smoke marijuana
- CBD users are treated the same as marijuana users
If you hold any of the above beliefs, there’s good news. Times change. Underwriting guidelines for insurance companies change. What once may have been right (particularly about marijuana) no longer applies today with many cannabis-friendly life insurance companies.
Myth 1: Marijuana Users are Always Auto-Declined for Life Insurance
No so long ago, any marijuana use listed on a life insurance application meant auto-decline. It also got logged in your MIB records, and then any other insurance company you applied with knew you got declined. (The MIB is secretive about their codes, so it’s difficult to know for sure whether they have one specific to marijuana use. They certainly have one for declines and multiple medical issues.)
Now there are a dozen 420-friendly life insurance companies who will cover people who smoke both recreationally and for medical reasons without a fuss. Several of these will even offer non-smoker rates.
If you have been declined for life insurance before due to marijuana use, contact us. We will help you get approved.
Check out these 12 marijuana-friendly life insurance companies.
Myth 2: The Legal Authorities, Your Boss, or Your Spouse will Find Out
The truth is they will find out only if you tell them or submit to an employee drug test. You, however, have the Health Insurance Portability and Accountability Act (HIPAA) protecting your privacy. Any marijuana disclosure you make must remain completely confidential between you, your doctor, and the insurance company. They legally can’t tell anyone.
HIPAA protects you at every stage of the insurance application process. It applies to any person or entity who handles medical information, including:
- Life insurance agents and their employees
- Life insurance companies
- Medical practitioners
- Hospital and clinic staff
No information of any kind can be shared with:
- Legal authorities
- Any government agency
- An employer
- Your spouse
- Family members
- Any person or entity who doesn’t need to handle your insurance application
Your information is private. It’s no one’s business but yours.
Myth 3: You Will Pay More for Life Insurance in States Where Marijuana is Illegal
Life insurance companies make no distinction in issuing a policy in states where marijuana use is illegal. If they accept cannabis in their underwriting guidelines, it doesn’t make a difference what state you live in.
This is true of states:
- Where both medical marijuana and recreational marijuana remain prohibited
- Which have limited approval or only allow medical marijuana
- States which have legalized both medical and recreational marijuana
Your rates will depend on how the insurance company underwrites cannabis use and the prices set with the states for the health class you would usually fall into.
Policy prices must be approved by the state insurance board and are set for each health class for each type of policy. There is no “cannabis smoker” health class.
To get an idea of cost right now, use the INSTANT QUOTES form on this page. Put in your information and quotes will be instantly displayed on the next page:
- If you are a light user of cannabis (up to 1x/week) put in “Preferred” as health class and look at Lincoln Term Elements rates. If you haven’t touched a cigarette in a year or longer …. put “no” as smoker/tobacco.
- If you use marijuana 2-3x/week, put in “Regular Plus” as health class and look at Prudential rates.
- If you have any health issues, take medications, use more then than 3x/week or need $500,000 of coverage or less, there might be other options available for you. Give us a call and we’ll guide you to the company that will be least expensive for your particular situation.
Myth 4: People who Smoke Cannabis and People who Smoke Tobacco Pay the Same
It is true that several companies will charge you smoker rates for cannabis, but not all.
A growing number of life insurance companies offer non-smoker rates for limited marijuana use. Some companies limit it to once or twice a week. Other companies have vastly looser guidelines on frequent use.
Surveys show that most recreational smokers partake fewer than 6 times a week. That’s significantly less than habitual tobacco smokers.
The friendliest of companies are fine with a non-smoker rating for smoking 6 times a week. Other companies will only consider once a week or less. So how frequently you smoke can affect which company you should apply with.
Myth 5: Life Insurance is Always More Expensive if You Smoke Cannabis
It wouldn’t be honest to tell you that this is untrue in every case. Many people apply with a life insurance company and then find out they have severe restrictions or an auto-decline policy on cannabis use.
The key is to find the company which best fits your smoking patterns. If you are a daily recreational smoker, you might pay smoker rates with some companies. But if you do your research first (or even easier, have an honest and upfront conversation with your life insurance agent) you can avoid these headaches.
When you are upfront with your life insurance agent about health issues or smoking inclinations, they can cross out the companies who will charge you unfairly. They can eliminate the companies who will cost you more.
The most important thing is to match the company to how frequently you partake if you’re a recreational smoker. If it’s for medical reasons, then apply with a company who will only look at your medical records. This is doubly true if you are like many medical marijuana patients who prefer edibles or non-inhalation methods.
Myth 6: Everyone is Tested for THC
There’s a complicated untruth on this one. It is untrue that everyone is tested for THC as a part of the life insurance application process.
However, it depends on the company you apply with and the type of life insurance you are purchasing.
There are tons of no exam policies available for similar pricing to traditional policies. Skip over the medical exam, and there’s no drug test. There are also companies who don’t ask about marijuana consumption and also don’t test for THC as part of the routine life insurance medical exam.
From a practical standpoint, if you throw a dart at the enormous hypothetical board of life insurance companies, there is a good chance you will be tested. But if you are not comfortable being tested for THC for your life insurance, talk to your agent about your options.
Myth 7: Marijuana Smokers Cannot Build Wealth with Life Insurance
There are two categories of life insurance, term and permanent.
Term life insurance policies do not build wealth because they only pay death benefits. Permanent life insurance policies not only provide death benefits and last for life, but they also contain a cash accumulation portion.
When you pay your premiums on a permanent life insurance policy, a portion goes to the death benefits. Another part adds to the cash value accumulation which also grows on its own.
Wealth-building Perks of Permanent Life Insurance
Nearly all permanent policies guarantee a minimum return so you won’t lose money on your cash value. It also grows on a tax-deferred basis, so there isn’t any income tax to worry about.
One of the functions of the cash value accumulation is a no-questions-asked loan. You can borrow the money any time you want. Your reason for borrowing the money doesn’t matter. The insurance company doesn’t care. They’re holding your death benefit as collateral after all.
You can access your money in the life insurance policy tax-free. Think of life insurance as a Roth IRA option, with no contribute limits and not market risk.
To learn more about building wealth with life insurance, checkout our free video course.
Most people are fine with term insurance. As long as you remember to buy the type of insurance that matches the reason for which you’re buying it, you’re good. However, if you have a substantial income or estate tax concerns, it would be wise to consider a permanent life insurance policy. We find that an indexed universal life insurance policy fits well with these needs.
Indexed universal life insurance provides you with the best range of options to tailor your permanent life insurance policy to your life. It also eliminates much of the stock market risk involved in other types of permanent policies.
The only trick is to use a marijuana-friendly company to find the best rates. As more and more companies choosing to revise their underwriting guidelines to become 420-friendly, your choices are increasing each year.
Myth 8: Insurance Companies Rate Medical Marijuana Patients and Recreational Smokers on the Same Criteria
Insurance companies evaluate recreational smokers and medical patients on entirely different criteria. Recreational smokers rates depend on the number of times they smoke every week.
Medical marijuana card holders are not rated for their marijuana use. Insurance companies assign health classes and ratings based on the medical condition, not the treatment. Each medical condition has its own set of underwriting guidelines.
Minor medical conditions that don’t affect your lifespan will have little to no impact on what you pay for a policy.
Life insurance companies evaluate more serious medical conditions on a case by case basis. Your rates will depend on when a doctor diagnosed the condition and the prognosis of the disease. The longer you have been in remission, and the better you respond to treatment, the less you will pay.
At the same time, it’s important to remember that each company rates medical conditions differently. This is why shopping around is so important.
If you have a particularly severe condition, then a guaranteed issue policy might serve you better. Coverage is more limited and more expensive than traditional life insurance policies, but approval is guaranteed.
Myth 9: Marijuana Business Owners Cannot Buy Life Insurance
There are still companies who will not issue a policy to a business owner in the marijuana industry. But these companies are getting left behind as the rest push toward the future.
They cite that marijuana is still illegal under Federal Law, even though most states have approved either medical or recreational use. The legal stigma causes more conservative companies to shy away from approving policies for business owners.
Luckily as companies change their underwriting guidelines on the personal side of life insurance, business policies are slowly changing as well.
Myth 10: You Cannot Find Affordable Life Insurance if You Smoke Cannabis
Depending on how much you smoke, many insurance companies just don’t care. Of course, each has one has its own guidelines for how much falls into the “so what” category. For most marijuana-friendly companies, less than two or three times a week is negligible.
Check out our list of top 12 marijuana-friendly companies for specific guidelines.
Myth 11: Life Insurance Companies Treat CBD Users the Same
CBD is a non-psychoactive. Cannabis-friendly companies understand this. CBD oil (or other forms) is a specialized product to treat medical conditions.
Remember in Myth 8 that insurance companies treat recreational and medical smokers differently? It’s the medical condition that concerns the life insurance company.
Also, most people consume 100% CBD products as an oil or a balm. Neither involves smoking of any kind. No reasonable insurance company would ever charge smoker rates when someone doesn’t smoke.
Plus, if the medical condition for which you’re using the oil or balm is minor, then you could receive a non-rated assessment as a non-smoker.
Vaping may induce smoker rates with some companies. So use caution when applying if your insurance agent isn’t 100% certain on the guidelines.
Conclusions on Life Insurance and Marijuana Use Myths
Life insurance companies have guidelines for everything. There are several cannabis-friendly life insurance companies who will neither auto-decline your application or charge you more. For medical marijuana patients, underwriters look at their medical condition, not the use of a cannabis treatment. Perhaps most importantly, anything you put on a life insurance application is private. They legally (thanks to HIPAA) cannot disclose marijuana use to any government authorities, your boss, or even your spouse.
How MJ Life Insurance Can Help
As an independent life insurance agency, we do not represent any specific life insurance company. Our goal is to match people with the company that has the best underwriting guidelines for their unique situation.
Because we specialize in helping medical marijuana patients, recreational smokers, and marijuana business owners find life insurance, we keep tabs on the shifts in the industry. We can help you find which cannabis-friendly companies are right for you and show you their current underwriting guidelines.
Whether you live in a prohibition state or one where both medical and recreational cannabis is legal, we can find you a low-cost life insurance policy. The insurance industry perception of marijuana is changing, albeit slowly.
Give us a call today at (888) 987-8447. We’re happy to answer any questions and there is never any obligation to buy.