Cannabis users or workers in the industry are often advised to be cautious what they disclose when seeking health insurance, believing that usage could automatically disqualify them or move them into a higher-risk category.
Even as legalized cannabis use becomes more normalized in more states, insurance questions remain, although some underwriters and firms throughout Washington are beginning to reexamine past positions.
Courtney Flores is an employee benefit consultant with Group Benefits Northwest, a broker/benefits consulting firm in Mount Vernon, who has been working with people in the cannabis industry seeking more health and life insurance coverage options for their staff.
The firm also works with the Cannabis Alliance, a statewide advocacy organization.
Flores said creating a new health policy does require a blood draw and a physical, but a lot of information collected is on the honor system.
But life insurance is a different animal.
Typically, if you get a life insurance policy through an employer, premiums are reasonable, including a death benefit that covers costs incurred through an illness and funeral expenses.
A death benefit of $50,000 wouldn’t likely be scrutinized as closely as an individual trying to obtain a policy with a higher death benefit of, say, $1 million. That’s typically when the insurer will look deeper into the applicant’s age, health history and whether they smoke nicotine.
Generally, with life insurance policies, there is a smoking and non-smoking rate, Flores said.
“With cannabis smoking, it will add an additional layer,” Flores said. ““Edibles might affect the rate, but they still can get life insurance.”
Julie Toomey with Toomey and Associates Insurance in Poulsbo, said that a person who consumes edibles one or two times per week isn’t considered a big risk. But for a daily consumer of cannabis, the ability to get life insurance is less certain.
Toomey said if an individual was using cannabis for medical purposes, an underwriter would look at why, on a case-by-case basis.
Many life insurance companies may offer a nicotine smoker rate for people who use marijuana, which may come with a high premium. Others are beginning to offer options based more on health history.
Carter Gray with Pacific Insurance Group in Bellevue said that, in the past, it has been difficult to find life insurance companies that would offer lower rates for people who would otherwise qualify except for the fact that they use cannabis. At best, they would qualify for a standard non-tobacco rating.
But now, someone with perfect health, no adverse family history who uses cannabis less than twice per year, may be able to qualify for a “super preferred” or a preferred rating.
“This means is that a 40-year-old man who uses cannabis occasionally would usually pay around $115 per month for a $1 million 20-year level term policy at a standard non-tobacco rate,” Gray said. “Under new guidelines, they can qualify for super preferred non-tobacco rates and pay around $55 per month for the same policy.”
Here is how it works with an A-plus rated life insurance company, which updated its underwriting guidelines in July:
• Super Preferred: Available for someone who uses marijuana less than two times per year and would otherwise qualify. (The form of cannabis doesn’t matter, such as smoking, vaping, or eating.)
• Preferred: Available if marijuana is used less than two times per month and they would otherwise qualify.
• Standard non-tobacco: Individual uses cannabis eight times or less per month.
Personal or business life insurance coverage is not currently available for those in the industry who work regularly with products containing THC, whether growers, processors, distributors or retailers. Gray and Toomey both said this is because cannabis is still illegal under federal law.