Want to buy life insurance? Also smoke marijuana? Until now, it’s been a pretty arduous process. Insurance companies are by nature pretty conservative, and seeing as how marijuana is still technically illegal at the federal level, it’s hard to imagine insurance companies changing their rules for marijuana users.
And yet change them they will! In June, a survey of life insurance companies revealed that 80% of companies have an underwriting policy in place for marijuana users, and 29% of those companies classify marijuana users as non-smokers.
Unfortunately, the survey didn’t name the life insurance companies, so I set out to get an idea of the best life insurance companies for marijuana users. This information can be pretty hard to find — life insurance companies don’t advertise specific features of their underwriting process.
In fact, some life insurance companies are incredibly secretive about their underwriting policies. In an e-mail exchange, a State Farm media representative told me that she was "not able to share with you specific underwriting policies because they are proprietary, however I can tell you that many factors, including the use of medical marijuana, are considered when underwriting a life insurance policy."
I contacted over a dozen media representatives at insurance companies. You have to give State Farm credit: despite their non-answer, they were the only life insurance company to respond to my request for information.
My next tactic was to pretend to be a customer. I reached out to Thaddeus Dziuba, Director of Life Insurance Planning at PRW Wealth Management in Massachusetts, to get an idea of which life insurance companies to start with. As an agent, Thaddeus is privy to the "proprietary" underwriting tables that I was trying to access.
The most surprising thing I learned from Thaddeus was that life insurance companies prefer social users for medicinal users because "they want to know the underlying cause. Cancer is more important to them than marijuana users. Thaddeus told me which companies offered non-smoking rates for social marijuana use — that is, marijuana use without a prescription or license.
I had assumed that having a prescription for marijuana would make it more acceptable in the eyes of life insurance underwriters. Despite the fact that the medicinal effects of marijuana are disputed, twenty-three U.S. states have allowed medical marijuana, versus just four states who have fully legalized it. Based on that, it would seem that the majority of legal marijuana users are medicinal users.
When I called the companies that Thaddeus had suggested, they confirmed that they prefer social use. The carrier with the most liberal policy towards marijuana usage that I contacted was Prudential. While the first Prudential agent I contacted couldn’t tell me the exact threshold, she did confirm that Prudential could offer non-smoking rates for a social marijuana user who smoked once every week. A representative from AIG Direct, a life insurance marketplace run by American International Group, suggested that marijuana users go with Prudential. According to the AIG Direct agent, I could smoke up to three times per week and still get non-smoking rates.
Agents I spoke to also confirmed that medical marijuana users face heightened scrutiny during underwriting. One agent told me that they’d have to investigate the medical cause and that the underwriter would give health issues more weight than the frequency of marijuana usage.
The agent at AIG Direct also told me that most other carriers (or at least the ones that work with AIG Direct, a full list of which is unavailable on their website) will accept social marijuana users, but give them the same rates as tobacco smokers.
Going through this process reminded me of just how horrible it can be to shop for insurance on your own or get questions answered. Life insurance companies make it difficult for you contact them directly unless you’re already a customer. Otherwise, they refer you to captive agents, who more often than not asked me to set up face-to-face meetings before they answered any other questions.
So what does this mean for marijuana users looking for life insurance? For starters, insurance companies are constantly re-evaluating the risk of various factors, including marijuana use. As the marijuana legalization effort moves forward, so will underwriters' view of social marijuana use. (This doesn’t mean you should put off getting life insurance, though, so don’t use that as an excuse to procrastinate.)
The importance that life insurance underwriters place on medical conditions is something that all life insurance shoppers should be aware of, including shoppers who have a prescription for marijuana. Shoppers who use marijuana socially still have to be aware that health conditions will be the largest contributor to determining their final premium.
Biggest takeaway? Getting information about underwriting policies from life insurance companies can be like pulling teeth. Your best bet is to get an independent agent or broker to contact the life insurance companies and do the comparison shopping for you. Unless, of course, you want to individually contact every insurance company in America.
Image: David Trawin