Life Insurance and Marijuana

In short, yes. There are some instances in which an insurance company may contest a life insurance beneficiary’s right to a life insurance claim. Typically, upon the death of the life insurance policy holder, the life insurance benefits are paid out within a few weeks of the death of the insured. However, there are numerous reasons why an insurance company may delay or outright refuse to pay out a life insurance claim and seek any legal reason it can find to not pay out a benefit.

Will I Lose or Be Denied Life Insurance If I Use Marijuana?

Although the federal and state laws concerning marijuana have evolved over the years, most life insurance companies still treat marijuana like tobacco. The idea is that there are many states that have legalized marijuana. It is important to note that unlike cocaine or other controlled substances, the usage of marijuana is not automatically grounds for denial of insurance. However, an insurance policy holder that uses marijuana will likely be charged a higher insurance premium for usage of the substance.

Whether or not a policyholder will have to pay an additional premium will be up to the underwriters of each insurance company. In other words, it is up to the insurance company to determine whether or not there is an additional premium for marijuana use. When evaluating an applicant for life insurance, an insurance company underwriter will use certain factors in order to determine whether or not an applicant should be approved or charged a higher premium:

• Whether or not the applicant’s use of marijuana is for recreational or medicinal purposes;
• If the marijuana is for medicinal purposes, what is the underlying medical condition that the marijuana is being used to treat;
• In what form the marijuana is being used, i.e. is the marijuana being smoked, vaporized, taken in liquid form, taken in pill form, or taken as an edible; and
• How often the applicant is using marijuana.

What if an Applicant or Policy Holder Uses Marijuana for Medical Purposes?

If an applicant for life insurance uses marijuana for medical reasons, it is unlikely that an insurance company would deny that applicant life insurance benefits. However, as noted above, many insurance companies would likely consider the marijuana user a smoker and raise the life insurance premiums accordingly. On the other hand, if the applicant provides the life insurance company with evidence of a medical marijuana card, or doctor’s note, the insurance company may decide to not charge any additional premiums.

Generally speaking, medicinal marijuana users will likely have higher life insurance premiums and fees than other life insurance applicants and policy holders that do not use marijuana. Most of the time, the reason for the higher fees and premiums is due to the underlying medical condition for which the medicinal marijuana is being used.

Thus, it is the underlying medical condition(s) that typically result in the higher fees and premiums for the usage of medical marijuana. For example, an individual who ingests medicinal marijuana to assist with their cancer treatment will likely see higher life insurance rates independent of whether or not the insurance company determines the marijuana is beneficial or a risk. The cancer, or underlying medical condition itself, would raise the insurance fees and premiums because cancer is a risk that the insurance company would take into account.

Why Would an Insurance Company Charge an Applicant More if They Use Marijuana?

Once again, some life insurance companies simply view marijuana as a risk similar to how they view a tobacco smoker as a risk. Therefore, even though there are rarely any reported deaths from marijuana overdose, insurance companies remain concerned about marijuana’s long-term effects. As such, the life insurance company will typically label a marijuana user as a smoker.

Regardless of whether marijuana actually causes mental health conditions such as psychosis or circulatory problems underwriters at insurance companies believe that the ingestion of the drug is a risk. Thus, with an increased risk for life insurance companies comes increased fees and premiums that are passed through to the life insurance applicant.

How Would the Insurance Company Know if an Applicant Withholds Information?

When determining whether to provide life insurance coverage, and the associated fees and premiums for said coverage, an insurance company will typically ask that an applicant submit to a medical examination before the company makes an offer for insurance. These medical exams often test an applicant’s blood and urine for the presence of illegal drugs and controlled substances, amongst other medical conditions.

Tetrahydrocannabinol, otherwise known as “THC,” is the principal psychoactive chemical that is found in marijuana. THC is slow to break down and leave the user’s system, and thus often shows up in blood or urine samples. Therefore, it is highly likely that an insurance company could discover unreported marijuana use. For this reason, an applicant seeking life insurance should not withhold information regarding their use of marijuana or underlying medical conditions. Withholding such information would allow an insurance company to contest the life insurance policy for misstatements and fraud made on the original application by the applicant.

Can a Life Insurance Company Be Required to Disclose a Policy Holder’s Marijuana Use to Law Enforcement?

In short, it depends. Although the exact law concerning disclosure responsibility by insurance companies differ by state, typically the law requires that an insurance company provide information about their clients under the following circumstances:

• An insurance company may be required to disclose marijuana use to comply with a court order;
• An insurance company may be required to disclose marijuana use to identify a fugitive, suspect of a crime, material witness of a crime, or missing person fitting the policy holder’s identity;
• An insurance company may be required to disclose marijuana use in cases of child abuse or neglect;
• An insurance company may be required to disclose marijuana use if the marijuana use is associated with a criminal investigation into the death of an individual; or
• When the disclosure of marijuana is otherwise required by law, such as for reports involving bullet wounds.

In addition to the above list, there are several more instances in which an insurance company would have to disclose medical information about their policy holder, but the above list contains the main exceptions.

Importantly, an insurance company will always have to surrender information about their client’s marijuana use if a court orders the insurance company to do so. In other cases, a policyholder may be able to contest the disclosure of their health information. or if required by law. Other than the list of above, most states don’t require insurance companies to report their policyholder’s usage of marijuana, although that may or may not change in the future.

Do I Need an Attorney for Help With Life Insurance and Marijuana?

As can be seen, life insurance companies have a broad range of factors that they can use to determine whether or not an applicant is eligible for a life insurance policy. If you feel that you have been unfairly denied a life insurance policy with regard to your usage of marijuana, you may wish to consult with an insurance lawyer in your area.

If the insurance company is shown to have discriminated against you, you may be entitled to damages for such discrimination. An experienced attorney can advise you as to whether or not you have a case. Finally, an attorney can also file a lawsuit on your behalf and represent you in court, as necessary.