Can you get life insurance if you take psychedelics?

Life insurance companies follow the research when it comes to new drugs, but will reject your application if there’s any sign of abuse.

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a certified personal finance counselor and former senior reporter at Policygenius, where he covered insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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Over the last six years, psychedelic drugs have gained increasing acceptance in the medical and legal realms as legitimate treatments for mental health conditions like depression and chronic pain. Colorado recently decriminalized psilocybin (a psychedelic produced by mushrooms), DMT, and other plant-derived psychedelics, and California could be next [1] — welcome news for people with mental health conditions that could be treated by psychedelics. But if you’re applying for life insurance while using one of these drugs, you should know that underwriters may not be as quick to accept psychedelics. Life insurance companies follow the research when it comes to new drugs, but will reject your application if there’s any sign of abuse.

How psychedelics are used

Researchers are finding growing evidence that psychedelics can help treat conditions like depression, anxiety, and substance abuse, says Dr. Nathan Sackett, assistant professor in the psychiatry department the University of Washington School of Medicine and director of its Center for Novel Therapeutics in Addiction Psychiatry. The federal Drug Enforcement Agency still considers them Schedule 1 drugs, meaning they have “no currently accepted medical use and a high potential for abuse.” Other schedule 1 drugs include heroin and ecstacy, but also marijuana, which has been approved for medical use in 37 states. [2]

While some states are moving toward decriminalizing psychedelics, the federal government still classifies psychedelic drugs alongside dangerous and addictive substances like heroin. For many people, the only legal way to access substances like psilocybin, LSD, or MDMA to treat their mental health is through research programs. 

The push to decriminalize these drugs seems largely driven by public opinion. While they have shown promise as treatments, “the research is still lagging behind” when it comes to identifying how they can be most effective outside of the lab, Sackett says. However, researchers are eager to explore their use as a way to improve existing treatments.

“Large data sets show that only about a third of people will respond to (psychiatric) medications,” Sackett says. Because of the limitations of traditional drugs, [3] some researchers have sought alternatives.

The pandemic led more people to seek mental health treatment, and psychiatrists are struggling to meet the demand. Access is also a problem; even among Americans with health insurance, almost half have had a mental health provider decline their plan, according to the Policygenius 2022 Health Insurance Survey.

“The biggest challenge in psychiatry is our treatments are very limited and people are desperate to get care, not only from the limited effect of the pharmacology we have available, but it’s very difficult to get a psychiatrist or therapist of any sort,” Sackett says.

Can you get life insurance if you take psychedelic drugs?

Abusing drugs can result in an automatic decline if you apply for life insurance. But if peer-reviewed studies continue to show the effectiveness of psychedelic drugs in treating conditions like depression, the insurance industry may begin treating these drugs like any other treatment for depression very soon, says Dr. Steven Rigatti, a medical risk consultant for life insurance companies and former medical director for MassMutual and MetLife. 

“Given the recent peer-reviewed studies showing effectiveness of psilocybin in the treatment of depression, I would expect the industry to move rather quickly to treat these drugs, when prescribed by a physician, like any other antidepressant — and to rate as an appropriately treated case of depression,” Rigatti says.

However, as is still the case with alcohol and marijuana, if there’s evidence of drug abuse or addiction, insurance companies will still decline, regardless of the legal status of psychedelic drugs. Even in the case of marijuana, which is legal in a number of states, some life insurance companies continue to charge frequent users more — or even reject their applications. With psychedelic drugs, the dosage for legitimate medical treatment is relatively infrequent, so insurers may see frequent use as an indication of substance abuse.

Life insurance companies are often wary of novel drugs or ways of using them — in Massachusetts, some life insurance companies were accused of discrimination for denying coverage to people who used the anti-HIV drug PrEP. [4] In these cases, the companies will often claim they’re being risk-averse while waiting for data on how these drugs affect mortality. Because of that, someone taking psychedelic drugs to treat depression might have a harder time getting life insurance. And while depression is a common condition for life insurance companies to encounter, a novel treatment like psychedelics “might be taken as an indication that the depression is more severe/resistant than most,” Rigatti says.

“Substance abuse is treated much more harshly, so if there were any indication that a medication was being taken for substance abuse, it would most likely result in a decline, no matter what it was,” he says.

That doesn’t mean you should stop taking psychedelic drugs if your doctor recommends them. Life insurance is important financial protection, but your health is important, too. 

Image: SeventyFour / Getty