With the U.S. laws around marijuana cultivation and consumption in a state of flux, there are many questions for those who use marijuana. In those states that have legalized it, whether recreational or medical, new norms are developing around life insurance and marijuana. At least 39 states have legalized marijuana in one form or another. Roughly 12% of adult Americans smoke marijuana, according to research done in 2019 by Gallup. According to the Pew Research Center, 91% of Americans favor legalization between medical and recreational options.
With marijuana becoming so common, wondering about life insurance marijuana makes perfect sense. Much like the laws around marijuana, though, insurance company policies are widely varied. Some life insurance companies will refuse marijuana smokers. Others will charge them like a tobacco smoker. There are even those who will mostly ignore marijuana use but focus instead upon any health issues it might reveal.
How marijuana impacts life insurance rates
Insurance companies determine their own rules, for the most part, when it comes to deciding how marijuana use will affect rates. Life insurance companies use a health classification system for policy applicants. There are five tiers to this ranking system: preferred plus, preferred, standard plus, standard and substandard.
The better an applicant’s health and health-related behaviors, the better their health classification will be. This system is one place where the relationship between marijuana and life insurance can get tricky.
Some companies will categorize marijuana users as tobacco users because the label ‘smoker’ already exists within the ranking system. In these situations, premiums can be significantly higher than for a non-smoker. However, other companies use a more nuanced approach to determine how marijuana use impacts applicants’ health. Still, some companies don’t raise rates for marijuana use itself but may do so for any underlying conditions that marijuana is being used to treat.
With legal marijuana still being so new and segmented, there is no standardized approach for life insurance companies. As a result, marijuana consumption will raise premiums in some cases and not in others.
The type of marijuana
The type of marijuana being used—whether medical or recreational—can play a significant role in how life insurance companies look at it. For instance, some companies see recreational use as a warning sign of health risk, while others see medical use as a health risk. The first case is due to the marijuana use itself. In contrast, the second instance has to do with the underlying health problems that marijuana is being used to treat.
The delivery method
How marijuana is consumed can also play a role in how it affects life insurance rates. Depending on the marijuana delivery method—vaping, smoking, edibles, etc.—there can be a range of potential impacts on a life insurance policy. Some people point to smoking as the least healthy consumption method, so they believe that other delivery methods should not cause an equivalent hike in rates. However, these determinations are made by individual companies. As a result, some companies may charge higher rates for people who smoke marijuana than those who vape it or consume it in an edible format, while other companies may make no distinction……Read More>>