Will the Life Insurance Industry Cover Cannabis Users?

The legal cannabis market is planned to reach $43 billion by 2025. In the US, as of July 1, 2021, 47 states have legalized cannabis, of which 19 states have legalized it for both recreational and medical use. This means that 43% of the US adult population resides in these states and that by 2025, 5.4 million Americans will be registered as patients in medical cannabis states.

Looking at these numbers, a question that often arises is - will all these people be able to get life insurance coverage?

Up until recently, using marijuana was taboo and was not supported, even condoned, by the health care and life insurance fields. Things have changed, research shows more in-depth findings, and customer behavior and demand have shifted.

When insurers review an individual applying, there are quite a few factors considered:

Age

Weight

Family history

Hobbies

Overall health and medical conditions.

Physical activity

Sleep habits

Diet

So in a sense, marijuana usage is only one factor of a whole plethora of factors reviewed. Life insurance companies will likely dive in and ask how often and why cannabis is used and the medical reason or condition it is treating.

Health and Marijuana Usage

At the time of marijuana usage, judgment and short-term memory are impaired. Use also alters perception and may put drivers at risk, for example. By the National Institute of Drug Abuse, marijuana may be linked with lifetime psychiatric problems and long-term health problems much later in life.

Marijuana Usage Frequency

Life insurance applications include questions about the applicant's marijuana usage frequency. This answer helps companies categorize health classes and determines life insurance rates. Sporadic users can oftentimes qualify for nonsmoking rates, but each life insurance provider decides its own parameters for occasional or infrequent users. This is key, as smokers tend to be offered more expensive rates.

Life Insurance Rates for Marijuana Users

The bottom line, or the final quotes when applying for life insurance, will depend on cannabis usage or nonusage and age, gender, and the amount of coverage seeking. However, life insurance quotes based solely on marijuana use increase - two or fewer times per month for occasional users and more than two times a month for regular users.

Medical Marijuana Usage

Life insurance companies generally don't really care if marijuana is used recreationally or medically in their resulting rates. But providers will need to know the underlying medical condition triggering marijuana usage; this condition can also affect life insurance coverage pricing.

Applying for Life Insurance

Today more than ever, life insurance providers are making tremendous efforts to reach potential applicants across a variety of approaches; many have integrated online platforms with or without the need for any further human interaction. They rely on applicants to be candid and take measures to confirm all the data is true and transparent.

Companies like Sproutt.com have streamlined all aspects of the application process, allowing both online and offline interaction, depending on the party's preferences, present a variety of options to choose from, and have shortened the insurance company's time of response. Full disclosure for all applications.

However, transparency and the expectation of authenticity are required both ways. Since it is more likely than not that an applicant with a history of medical marijuana usage will be able to get life insurance, it's crucial they'd be honest and specific about their usage history. When applying, the insurer is permitted to check all outside records. The answers on the application need to match medical records history to validate the information provided. Medical exams may be requested as well, a prescription review may occur, and even access to motor vehicle records. This is not just the case for marijuana users.

If red flags come up during this research - history of substance abuse, criminal records, moving violations like DUIs, the rate will probably be higher. In some extreme cases, applicants may be denied.

Legalization Dictates Services

Marijuana usage is on the rise, legalization is close to follow, and an increase in services supporting recreational medical use. The insurance industry has made strides to accommodate these changes, not without research and following consumer behavior.

Today the life insurance industry can accommodate and will not leave recreational users and those using for medical purposes in the dark. Policies are available and are dependent on usage, conduct, frequency, and reason, as they are based on a variety of additional factors as applicants are required to be candid and forthcoming.

Written By: Annie Dudkiewicz