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June 19, 2013 at 07:34 AM
With eighteen states accompanied by Washington DC now allowing marijuana for medicinal use, you and your clients may be wondering how life insurance companies are viewing this new outlook on marijuana usage.
Nearly 40% of the states have legalized the medical use of this substance. In addition, eleven more states have pending or failed legislation. Scientific research has unveiled medical benefits to marijuana that were once unknown. Life insurance underwriters are now faced with how to rate the usage of this medicinal substance.
Medical marijuana is used to treat a wide array of diseases and illnesses including, but not limited to, chronic pain, insomnia, unintentional weight loss, nausea, premenstrual syndrome, asthma, and glaucoma.
The eighteen states (along with Washington DC) that have now legalized marijuana are Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and Washington.
With so many states legalizing the medical benefits of this drug, will life insurance companies also acknowledge the good? The answer: It depends.
Must do
These tips will help your clients get approved for life insurance if they use marijuana. First the applicant needs to disclose the marijuana use information up front. If marijuana shows up on blood or urine tests, without the applicant telling the carrier, the applicant will be declined. All carriers will require a drug questionnaire when you disclose this information upfront, as they will want to know the reasons for use as well as how often. All carriers will also require a urine test.
Each life insurance company has its own guidelines and underwriting rules; therefore the use of marijuana is viewed differently by each. Some companies will rate applicants as a standard smoker, giving them double the rates of those as a nonsmoker while others are okay for occasional use. The rules and ratings vary widely. Let’s take a look.
Ratings for the marijuana user
Marijuana usage is not viewed as other drugs such as cocaine, for example. Testing positive for THC will not lead to a flat rejection of a life insurance policy. However, the use of this substance can result in receiving a cigarette smoker’s rates, which are substantially higher than those of a non-smoker.
Life insurance classifications for a marijuana user are guidelines and are not set in stone; they can change at any time per the company consideration. Also other health conditions could change consideration. The majority of the company information below comes from a blog researched and written by Jeff Root, owner of Root Financial.
American General: Smoking marijuana more than twice monthly could result in the rates of a smoker with the possibility of a table rating. Smoking two times per month will set the rating as a standard non-smoker. Applicants who smoke two times a year or less could be rated as a preferred best non-smoker.
Banner Life: Applicants could be considered a standard smoker with occasional use. They could be rated as a substandard table B smoker with daily use.
Columbus Life: Applicants over 25 years old who smoke pot experimentally to intermittently might get standard smoker rates. Moderate use could be a table 2 rating. Heavy use will be declined. Other drug use will also be a factor. Fidelity: A standard smoker classification will be given if there is any marijuana use in the past 12 months. However, an applicant be classified as a sub-standard smoker if medical marijuana is prescribed.
