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The best life insurance companies for marijuana users

Marijuana use affects your life insurance premiums, but each provider assesses it differently. Here’s how different companies treat recreational and medical use.

Amanda Shih author photoPat Hanzel

Amanda Shih & Patrick Hanzel

Published September 14, 2020

KEY TAKEAWAYS

  • Some life insurance companies assign smoker rates to marijuana users

  • Smoker rates can be 200% more expensive than nonsmoker rates

  • Your frequency of use and other factors influence how you’re rated

  • If you’re a medical user, it’s likely you’ll be rated based on the condition you’re treating

According to the Centers for Disease Control, marijuana is the most commonly used drug in the United States. A survey by the U.S. Department of Health and Human Services found 43.5 million users in 2018 alone. 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. Some won’t take infrequent use into account, while others will assign you smoker rates (which can be two to four times as much as nonsmoker rates) based on any amount of usage.

But like many factors in life insurance, each company has a slightly different approach, and your premium will depend on your frequency of use (and in some cases, whether you smoke or use another delivery system).

How life insurance companies view marijuana use

When you shop for life insurance, you’ll be assigned a health classification based on your health, hobbies, and family health history during the underwriting process. The worse the classification, the higher your premiums will be. The rating system looks like this:

  • Preferred Plus
  • Preferred
  • Standard Plus
  • Standard
  • Substandard

Substandard classifications are also called table ratings, which are numbered or lettered (e.g. Table B, Table 4).

Some life insurance companies grade marijuana users as tobacco smokers, leaving them eligible for tobacco rates only (which can be 200% more expensive than nonsmoker rates). Other life insurance companies will give nonsmoker rates and even their best rates to marijuana users, depending on the frequency of use.

"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,” Patrick Hanzel, Policygenius’ Advanced Planning Specialist and Certified Financial Planner explains, “but the underlying health conditions, if it’s prescribed to treat those, are the big differentiators.”

Vaping and edible marijuana

Not all life insurers differentiate between the different delivery systems for marijuana, but some will. The providers that do set them apart will often give you smoker rates if you vape, while others might be more flexible about ingesting marijuana, depending on the frequency of and reasons for use.

Some providers, like AIG, will offer favorable rates to those who use CBD, but many companies don’t differentiate between CBD and THC during underwriting.

Do life insurance companies test for THC?

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 test positive for THC during 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.

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Carriers often view recreational marijuana fairly favorably but if there are underlying health conditions it's a different story.

- Patrick Hanzel, Advanced Planning Specialist and Certified Financial Planner at Policygenius

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Why you shouldn’t lie about drug use on your life insurance application

Even if there is currently no THC in your blood or urine, it’s important to be honest with the life insurance company about your marijuana use. 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 your medical records will very likely 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.

If a life insurance company finds out you’ve lied to them, they will also report you to the Medical Information Bureau, or MIB, which means that every life insurance carrier will know you lied on a life insurance application and could decline to cover you.

Should the carrier accept your application and find out you lied afterward, they can cancel your policy during the contestability period. Even worse, the provider could deny your family’s claim after you pass away, leaving them unprotected.

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The best life insurance policy for marijuana users

You can still get competitive coverage if you use marijuana with a Lincoln TermAccel policy (as long as you don’t earn an income in the marijuana industry). Lincoln TermAccel offers coverage almost immediately and marijuana smokers may see lower prices for more coverage than they would with other insurers.

The application process for a Lincoln TermAccel policy takes two to three days. The insurer conducts a phone interview that is followed by a deep dive into an applicant’s insurability via their prescription history, motor vehicle report, and medical history. Most of the time, this is enough information to warrant an application approval (or denial), but sometimes additional labs will be required.

Lincoln TermAccel

Lincoln TermAccel is a competitive policy for individuals in good health — though if you have a more complicated medical history, it may be harder to get approved for coverage. Policies are available to individuals 18-60, with some age restrictions for 30-year terms and smokers.

How does Lincoln TermAccel work?

Lincoln TermAccel offers all the perks of a term life insurance policy — without an in-person medical exam for individuals 18-60. Instead, the insurer conducts a phone interview that is followed by a deep dive into your insurability via your prescription history, motor vehicle report, and medical history. Most of the time, this is enough information to warrant an application approval (or denial), but additional labs might be required if something in your background check is flagged as a risk.

The entire process takes about two to three days — compared to the usual wait time of four to six weeks for a traditional life insurance policy.

The policy is especially valuable to people who may not get an affordable no medical exam policy elsewhere. Marijuana smokers who don’t work in the industry can get competitive rates and smokers have a better chance of getting coverage than they would with other accelerated life insurance policies.

Even though the application process for a Lincoln TermAccel policy usually doesn’t require a medical exam, the coverage you can get is comparable. Term length offerings include 10-, 15-, 20-, or 30-year terms and the death benefit amount can be anywhere from $100,000 to $1 million. Policyholders have the option to convert their coverage into a whole life insurance policy at the end of its term. Other supplemental coverage options include the accelerated death benefits rider, children’s life insurance rider, and waiver of premium rider.

How much does Lincoln TermAccel cost?

Lincoln TermAccel premiums are some of the lowest in the industry. According to Policygenius quoting data, here’s how much you can expect to pay with a Preferred health classification for a $500,000 policy:

Monthly premiums for women

AGEAVERAGE MONTHLY PREMIUMS
25$17.31
35$19.09
45$39.54
55$88.72
60$149.65

Monthly premiums for men

AGEAVERAGE MONTHLY PREMIUMS
25$20.42
35$22.36
45$50.22
55$120.73
60$211.44

The best life insurance companies for marijuana users

We’ve assigned a ranking of “excellent” to insurers who may still give Preferred Plus and Preferred ratings to marijuana users and “good” to insurers who may still offer Standard Plus or Standard ratings. For more frequent users, we’ve also included insurers who offer smoker or substandard rates, ranked as “fair,” because other insurers will generally decline higher frequencies of use. Lincoln Financial and AIG tend to be the best life insurance companies for marijuana users, with Lincoln offering the best policy for marijuana users.

The best life insurance carriers if you used to use marijuana but quit a year or more ago

COMPANYRANKING
AIGExcellent
BannerExcellent
Lincoln FinancialExcellent
Mutual of OmahaGood
Pacific LifeExcellent
PrincipalExcellent
ProtectiveExcellent
PrudentialExcellent
SBLIExcellent
TransamericaExcellent

The best life insurance carriers if you use marijuana 1-2 times per year

COMPANYRANKING
AIGExcellent
BannerFair
Lincoln FinancialExcellent
Mutual of OmahaGood
Pacific LifeGood
PrincipalExcellent
ProtectiveExcellent
PrudentialGood
SBLIExcellent
TransamericaGood

The best life insurance carriers if you use marijuana 3-11 times per year

COMPANYRANKING
AIGExcellent
BannerFair
Lincoln FinancialExcellent
Mutual of OmahaGood
Pacific LifeExcellent
PrincipalExcellent
ProtectiveGood
PrudentialGood
SBLIExcellent
TransamericaGood

The best life insurance carriers if you use marijuana one time a month

COMPANYRANKING
AIGExcellent
BannerFair
Lincoln FinancialExcellent
Mutual of OmahaGood
Pacific LifeExcellent
PrincipalExcellent
ProtectiveGood
PrudentialGood
SBLIExcellent
TransamericaGood

The best insurance carriers if you use marijuana two times a month

COMPANYRANKING
AIGExcellent
BannerFair
Lincoln FinancialExcellent
Mutual of OmahaGood
Pacific LifeExcellent
PrincipalExcellent
ProtectiveGood
PrudentialGood
SBLIExcellent
TransamericaFair

The best insurance carriers if you use marijuana three times a month

COMPANYRANKING
AIGExcellent
BannerFair
Lincoln FinancialExcellent
Mutual of OmahaGood
Pacific LifeExcellent
ProtectiveGood
PrudentialGood
SBLIGood
TransamericaFair

The best insurance carriers if you use marijuana 4-8 times a month

COMPANYRANKING
AIGExcellent
Lincoln FinancialExcellent
Mutual of OmahaGood
ProtectiveGood
PrudentialGood
SBLIGood
TransamericaFair

The best insurance carriers if you use marijuana 9-12 times a month

COMPANYRANKING
AIGFair
Mutual of OmahaGood
ProtectiveGood
PrudentialGood
SBLIGood
TransamericaFair

The best insurance carriers if you use marijuana 13 times a month or more

COMPANYRANKING
AIGFair (up to 15x/mo, decline after)
Mutual of OmahaFair (up to 20x/mo, decline after)
ProtectiveFair
PrudentialFair (up to 24x/mo, decline after)
SBLIFair (up to 24x/mo, decline after)
TransamericaFair

Life insurance & medicinal marijuana

Many carriers view medical marijuana differently than recreational marijuana, and how they determine your health rating will depend largely on the health condition for which it’s been prescribed. Do some research or consult with an insurance professional to find the best provider for your condition.

There are carriers, however, that will rate you based on medicinal use. Those insurers may offer you standard rates if you use less than 12 times per year or if the substance is not inhaled.

The best life insurance companies for medical marijuana users

CompanyRanking
ProtectiveFair
TransamericaGood

Life insurance and the medical marijuana industry

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. But that leaves thousands of industry employees without financial protection.

While a few smaller insurers are now beginning to offer coverage to cannabis industry businesses and employees, most midsize and large insurers are still declining because of the risk. For employees having a hard time finding private coverage, Morgan Fox, Media Relations Director at the National Cannabis Industry Association, suggests that the best immediate option is to encourage your employer to look hard for someone who will provide group coverage to the business.

Fox also cites legislation like the Secure And Fair Enforcement Banking Act of 2019, which would “protect financial services providers from federal interference or punishment if they decide to work with people in the industry,” which could encourage risk-averse insurers to begin changing their attitudes.

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The bottom line

The two main factors in how marijuana use affects your life insurance are the frequency of use and whether your use is medicinal. Generally speaking, if you’re an infrequent, recreational user who doesn’t use e-cigarettes to smoke, affordable nonsmoker rates may still be available to you. If you’re a frequent user you might pay higher premiums and have fewer providers from which to choose, but you’ll probably be able to get covered. If you’re a medical marijuana user, most life insurers will rate you based on the condition you’re treating, so you should compare quotes to find out which provider will offer the most affordable premiums for your condition.

An insurance agent or broker can help you find the best policy based on the specifics of your marijuana usage, health, and finances. Above all, it’s important to be honest about your marijuana use during the entire application process — getting caught in a lie could cost you your coverage and cost your loved ones financial protection after you’re gone.

Insurance Expert

Amanda Shih

Insurance Expert

Amanda Shih is an insurance editor at Policygenius in New York City. Previously, she worked in nonfiction book publishing and freelance content marketing. Amanda has a B.A. in literature and communication from New York University.

CERTIFIED FINANCIAL PLANNER™ & Advanced Planning Specialist

Patrick Hanzel

CERTIFIED FINANCIAL PLANNER™ & Advanced Planning Specialist

Patrick Hanzel is a CERTIFIED FINANCIAL PLANNER™ on the advanced planning team at Policygenius. He has eight years of industry experience and previously worked as an advisor and associate at Northwestern Mutual.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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