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Best life insurance companies for marijuana users Marijuana use is a grey area for life insurance companies. That's why it's important to choose one that will accommodate you and offer the best rates.
Some insurance companies assign smoker rates to marijuana users
Smoker rates can be 200% more than non-smoker rates
Your frequency of use and other factors influence how you’re rated
Life insurance companies are historically conservative, and many carriers are still cautious about marijuana use – both recreational and medicinal — regardless of whether your state has legalized it. Sometimes that means you’ll be rated a smoker and assigned smoker rates (which can be two-to-three times as much as non-smoker rates).
But like many factors in [life insurance](https://www.policygenius.com/life-insurance/, each company has slightly different approaches, and your rates will depend on your frequency of use (and in some cases, whether you smoke or use another delivery system).
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According to the CDC, marijuana is the most commonly used drug in the United States, with 37.6 million users in the last year alone. Since marijuana use is so prevalent in this country, it’s worth taking a closer look at how it impacts all aspects of our lives, including life insurance.
If you’re shopping for coverage, you can expect the following: during the underwriting process, you’ll be assigned a health classification based on your health, hobbies, and family history. The worse the rating, the higher the premiums. The rating system looks like this:
Some life insurance companies grade marijuana users as tobacco smokers, rendering them eligible for tobacco rates only (which can be 200% more than non-smoker rates). Other life insurance companies will give non-smoker rates and even best rates to marijuana users, depending on the frequency of use.
As Patrick Hanzel, Policygenius’ Advanced Planning Specialist and Certified Financial Planner explains, "The main factor with marijuana is that recreational use is actually often looked at fairly favorably for a lot of carriers and most can offer non-tobacco rates, but the underlying health conditions, if it’s prescribed, is the big differentiator.”
When you apply for life insurance, you'll have to take a free medical exam. Part of the medical exam is a blood and/or urine test that will include a test for THC. This will reveal your marijuana usage.
THC shows up in a blood test anywhere between three and 14 days after marijuana use and is detectable in urine for up to a month, depending on the frequency of use. There are some companies that will rate you more favorably if you admit to marijuana use but don’t have THC in your screening, so if you’re applying for life insurance, you may want to abstain for a month or so to ensure your urine is clean.
Even if there is no THC in your blood or urine currently, it’s important to be honest with the life insurance company about your marijuana usage. Lying on a life insurance application is insurance fraud and it’s very likely the life insurance company will find out about your marijuana use anyway.
During underwriting, there’s a good chance that the underwriters will request your medical records, and chances are very high that your medical records will have some mention of your marijuana use. If an insurance company finds evidence that you are a marijuana user and you haven’t disclosed your drug use, they can deny your application.
Plus, if a life insurance company finds out you’ve lied to them, they will report you to the Medical Information Bureau, or MIB, which means that every life insurance will carrier will know you lied on a life insurance application and could decline to cover you.
And if you do lie and your application is accepted but the carrier finds out afterward, they can cancel your policy during the contestability period. Even worse, they could deny your family’s claim, leaving you and your family unprotected.
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Because of the intricacy of underwriting guidelines, there’s no one carrier that is best for marijuana use. But there are some that are more likely to offer you better ratings (and lower premiums) depending on your frequency of use.
We’ve assigned rankings of “excellent,” “good,” and “fair” to carriers who may still give Preferred, Preferred Plus, and Standard ratings to marijuana users; for more frequent users, we’ve also included insurers who offer smoker or substandard rates as “fair”, because other insurers will generally decline this frequency of use. AIG tends to be the best life insurance company for marijuana users.
For many carriers, medical marijuana is viewed differently than recreational marijuana, and how they determine your health rating will depend largely on the health condition it’s been prescribed for.
Many insurers have guidelines that stipulate that medical marijuana use will be rated based on the underlying condition, and substandard ratings (also called table ratings) are a common result. There are carriers, however, that will give standard rates if use is less than 12x per year or if the substance is not inhaled.
Because marijuana is still illegal on a federal level, financial institutions and insurance companies face a lot of regulatory hurdles if they want to do business with anyone who works in the marijuana industry — so many of them decline to do just that.
In fact, of the companies that Policygenius works with, just one will consider placing policies for employees of the marijuana industry: Pacific Life.
All others are currently declining this risk. But attitudes and policies about marijuana are changing at a good clip — even at life insurance companies.
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