Smoke Weed and Need Life Insurance? Some Companies Are Cool With Marijuana

Though it’s increasingly legal, marijuana can still raise red flags for life insurance companies. While some insurers don’t mind covering you if you use pot, others will charge you higher rates or deny your application outright.

About 22.2 million Americans use marijuana every month, according to the Centers for Disease Control and Prevention. It’s now legal for medical use in 36 states and for recreational use in 15, as well as for both in Washington, D.C.

If you’re one of the millions of Americans who use marijuana and you’re looking for a life insurance policy, you can probably find coverage. You may need to shop around, however, as companies don’t view the risks that weed poses to long-term health in the same way.

Can marijuana users get life insurance?

In a word, yes, you can get life insurance if you use marijuana. In fact, life insurance may not cost more for some marijuana users than for those who don’t use it at all — depending on the insurance company and other factors.

Every insurer measures risk differently. Most consider factors like age, gender, weight and family health history. Some may look at your hobbies, such as mountain climbing or skydiving. Your history of drug use, whether marijuana or otherwise, can also come into play.

If you use marijuana, companies will likely consider how often and why you use it, according to Quotacy, a Minneapolis-based life insurance brokerage. If there’s a medical reason, the insurer will want to know about the condition you’re treating.

Because each company has different standards, you may need to research several insurers before you find one willing to cover you at a reasonable price. You can also work with a life insurance broker or agent who is experienced with marijuana use and can shop the market for you.

How do life insurance companies view marijuana use?

When applying for coverage, you’ll have to answer questions about your lifestyle and in many cases take a life insurance medical exam that may include drug testing.

“Keep in mind, if the application process includes a blood test, the marijuana usage might turn up in the results,” said Adam Weinberg, brand director for Haven Life Insurance, in an email.

Be sure to tell the truth about your use before taking your test. Lying on a life insurance application can result in an automatic decline for coverage. You also run the risk of your insurer refusing to pay your death benefit to your loved ones if it finds out later that you lied on your application.

When you apply for life insurance as a marijuana user, there are three potential outcomes:

  • You’re declined outright.

  • You’re approved at a tobacco rate, even if you don’t use tobacco. Rates for cigarette smokers and other tobacco users are typically several times higher than what a healthy applicant who doesn’t use tobacco might pay.

  • You’re approved at a non-tobacco rate.

While some studies have shown marijuana to be less harmful to the lungs than tobacco smoke, smoking is still smoking — meaning it’s less healthy than not smoking at all. And even if you don’t smoke but choose to vape or eat your weed, the jury is still out on how bad it is for you long-term.

“We don’t have a crystal-clear vision of how marijuana affects mortality because it has been illegal, so getting people to admit it — and doing the studies that an actuary needs — have been challenging,” says Jeremy Hallett, CEO of Quotacy.

How will marijuana use affect your rates?

When insurers decide whether to sell you a policy and how much to charge, they generally don’t consider whether marijuana is illegal where you live, Hallett says — but they do pay attention to how often you indulge. Occasional use of pot may not affect your rate much, if at all, while more frequent use could lead to higher premiums or even a denial.

Chris Abrams of Marijuana Life Insurance, an independent agency in San Diego, provided sample rates to show how typical marijuana habits can affect monthly insurance premiums. Abrams’ hypothetical applicant is a 30-year-old man, in excellent health, applying for a $500,000, 30-year term life policy.

  • Never uses marijuana: $30 a month.

  • Twice a year: $31.

  • Once or twice a week: $55.

  • Two to three times a week: $62.

  • Four times a week: $126.

  • Six times a week: $166.

The breaking point appears to be more than six times per week for recreational users. Very few insurance carriers will offer standard, non-tobacco rates to daily pot users, according to Hallett.

For most companies, Abrams says, “daily use is a ‘decline.'”

Does using marijuana mean you’ll lose your life insurance?

If you already have life insurance and you decide to give marijuana a try, don’t worry — it won’t affect an existing policy.

“Once you’re underwritten at a point in time for your insurance, that is your rate,” Hallett says. “The carrier can’t come back and raise your rates. You’re good to go.”


Why Permanent Life Insurance Isn’t Right for Most People

For people seeking financial security in case of an untimely death, there are two main types of life insurance: term and permanent. The truth is, however, most people don’t need permanent life insurance.

You might assume permanent life insurance is the better choice because it never expires, as long as you pay your premiums. Perhaps that’s why most buyers end up with a permanent policy. The 2020 Insurance Barometer Study by LIMRA, a life insurance trade group, found 51% of policyholders have permanent coverage only, while 33% have term coverage only.

If you’re looking into a plan for yourself, don’t get swayed by those numbers. Term life insurance, particularly for young, healthy people, is more affordable and less complex than permanent life insurance.

There are some situations where permanent life insurance is the right choice. But those cases are few compared with the typical need for life insurance.

Comparing the options: Term vs. permanent life insurance

If people in your life would suffer financially if you suddenly died, life insurance is a worthy investment. The death benefit that insurers pay out upon your death can cover debts, replace your lost income or help pay for your children’s education.

There are various types of both term and permanent life insurance, but the broad strokes of the two main buckets are as follows:

  • Term life insurance covers a set number of years. Once the plan expires, so does your death benefit, so this policy pays out only if you die while your plan is active.

  • Permanent life insurance lasts for the rest of your life. These policies also typically act as an investment vehicle — as you pay your premium, your plan accrues a “cash value” that you can borrow against or pull money out of.

Permanent life insurance: pros and cons

Permanent life insurance is your best option if the money from it will be needed no matter when you die. For example, if you know you’ll have lifelong dependents, such as a child with a disability, or want to help your heirs pay hefty inheritance or estate taxes or even funeral costs, a permanent life insurance policy is probably the way to go.

But there are drawbacks:

Permanent life insurance is much more expensive than term life. Whole life, the most common type of permanent coverage, can cost 10 to 18 times more than 20-year term coverage for a healthy applicant buying a $500,000 policy, a comparison of average life insurance rates shows.

The higher price means you may not be able to afford enough permanent coverage to meet your family’s needs. And if you choose permanent life insurance but later find you can’t keep up with the monthly premiums, your policy may lapse and you’ll run the risk of having no coverage when you die.

Permanent life insurance is often more complex than term life due to its investment component. And while your policy may build cash value, insurance can be an expensive way to save for retirement. The cost of the insurance is a drag on your investment performance, so you should consider other options first.

“It’s especially important for young people to take advantage of IRAs, Roths and traditional 401(k)s,” says James Hunt, a life insurance actuary who advises the Consumer Federation of America. “Don’t buy whole life insurance unless you have plenty left over after maxing out your IRAs.”

The benefits of choosing term life insurance instead

Many people will “outgrow” the need for life insurance as they put away savings, pay off their debts and finish raising their kids. That’s what makes term life insurance compelling: It can cover you for the years you need it, and then you can reassess.

The lower cost of term life is always a benefit, but it’s especially important in volatile times such as a recession or pandemic, when you could easily lose your job and your ability to pay a high premium.

And while term life doesn’t have cash value, many policies now include “living benefits” that allow you to withdraw cash in certain circumstances, according to Jeff Root, founder of Rootfin, an insurance agency based in Austin, Texas.

With this option, “you can access the death benefit while you’re still alive and pay out if you have a cancer, heart attack, stroke or other qualifying events,” Root said in an email.

The point is for your policy not to pay out

If you outlive your term life insurance policy, that’s a good thing. As Root noted, “the goal is for term life insurance NOT to pay out — you don’t want to die early.”

All that being said, choose the life insurance plan that is best for you. You can compare quotes for term life insurance online, or speak to a trusted financial advisor to understand the costs of permanent life insurance if you decide that’s a better fit.