Pubdate: Sun, 06 Sep 2015
Source: Orange County Register, The (CA)
Copyright: 2015 The Orange County Register
Author: Barbara Marquand
Note: Barbara Marquand is a staff writer at NerdWallet, a personal 
finance website.


Life insurance companies can be like prudish acquaintances. Smoke 
cigarettes? For shame. Weight gain? Unfortunate. Deviations from 
perfection usually lead to higher life insurance rates. But wait. 
Smoke pot? Shrug.

Not only can you qualify for life insurance as an occasional 
marijuana user, but you also may get decent rates.

Occasional marijuana use doesn't count as smoking at almost a third 
of life insurance companies that have guidelines about rates for pot 
users  as long as they don't also use nicotine products  according to 
an April 2015 survey of almost 150 underwriters by Munich American 
Reassurance Co.

How often you use marijuana does count, though. Heavy recreational 
use is generally counted as smoking, even at companies that take a 
more lenient attitude toward cannabis, and could even result in a 
denial with some insurers.

Life insurers getting hip to pot

The life insurance industry has lightened up on marijuana in the past 
decade or two, as have many states. Colorado, Oregon, Washington and 
the District of Columbia have legalized marijuana for recreational 
use. Medical marijuana is legal in 25 states.

A generation ago, marijuana users were often denied life insurance 
coverage, said Allen St. Pierre, executive director of NORML, a 
nonprofit in Washington, D.C., that advocates for marijuana 
legalization. Some people's policies were canceled when they tried to 
increase their coverage and lab tests revealed marijuana use, he added.

That has changed, and marijuana users generally are not automatically 
declined coverage today, al though "they often are being asked to pay 
an enhanced premium," St. Pierre said.

Qualifying as a nonsmoker

The key to getting low rates as an occasional marijuana user is to 
find a company that considers you a nonsmoker. Average life insurance 
rates for smokers are easily three times what they are for nonsmokers.

The rules for whether marijuana users qualify for smoker or nonsmoker 
rates vary among insurance companies and often depend on how much and 
why applicants use the drug, said independent insurance agent Jeff 
Root, founder of the Rootfin agency in Austin, Texas. Root researched 
underwriting rules at dozens of companies and found that:

Marijuana users might qualify for the best life insurance rates if 
they have a prescription for medical marijuana. Rates still will 
depend on health of the applicant, including the condition the 
marijuana is prescribed to treat.

Recreational pot users usually don't qualify for the very best 
nonsmoker rates, but they can qualify for standard nonsmoking rates 
at some companies.

Frequency of use matters. Most insurers will consider you a smoker if 
you use marijuana more than once a week.

Root assembled some examples of how companies rate marijuana users on 
his website. Here are examples of nonsmoker rates for occasional 
nonmedical marijuana use, according to Root:

American General (AIG): Offers "preferred best" nonsmoker rates to 
applicants using marijuana two times a year or less, and standard 
nonsmoker rates for up to two times a month.

Lincoln National: Offers standard nonsmoker rates for people who 
smoke pot up to two times a week and substandard nonsmoker rates for 
three to four times a week. Marijuana use four or more times a week 
will result in a denial.

MetLife: Provides "preferred plus" nonsmoker rates for those who use 
marijuana less than once a week.

Prudential: Offers "standard plus" nonsmoker rates for applicants who 
use pot up to two times per month and have a negative lab result for 
marijuana. Substandard nonsmoker rates are offered for people who use 
pot up to four times a week. You're declined for coverage if you use 
marijuana more than four times per week.

Some companies foggy on marijuana rules

Some life insurance companies still are determining how to treat 
marijuana users. Among the insurance underwriters who were surveyed 
by Munich American Reassurance Co., one in five said their companies 
did not yet have official underwriting policies for marijuana. Of those:

29 percent said their employers would develop guide lines in the next 
12 months.

42 percent said it would take two to three years.

26 percent said rules probably wouldn't be complete for at least three years.

More than a third of all the underwriters surveyed (36 percent) said 
they believe marijuana users are nonsmokers, and 49 percent said they 
believe there is no difference in risk between a marijuana user who 
smokes the drug and one who ingests it through "edibles." But 43 
percent thought that smoking marijuana was riskier than ingesting it, 
and 8 percent viewed ingesting marijuana as riskier.

Life insurance guidelines for marijuana users will continue to evolve.

"Despite a legalization movement across the country, scientific 
studies on the long-term effects of marijuana use are mixed," Bill 
Moore, Munich American's vice president of underwriting and medical, 
said in a press statement. "As a result, the life insurance industry 
is left with more questions than answers, making it crucial for 
companies to manage risk appropriately."

How to find the best life insurance rates

Follow these tips to get coverage at the best price if you're a marijuana user:

Work with a good, independent agent who can steer you to companies 
that are more marijuana-friendly.

Be upfront about your marijuana use. Life insurance medical exams 
typically include blood and urine tests that will reveal pot use. If 
you lie about use and a lab test reveals the drug in your system, the 
insurer likely will deny your application for coverage, Root said.

Send a cover letter explaining the marijuana use with your 
application. Not all life insurance applications ask about marijuana, 
Root said. For his clients who use marijuana, he includes a cover 
letter explaining why and how often the applicant uses the drug.

Compare life insurance quotes among insurers.

Finally, if you need life insurance, don't let marijuana use prevent 
you from applying for coverage. You may qualify for better rates than 
you expected.
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MAP posted-by: Jay Bergstrom