Marijuana is now legal for recreational use in the majority of U.S. states, and medical marijuana programs exist in nearly every state. Yet carrier underwriting guidelines have not moved in lockstep with legislation. As an agent, you are going to encounter marijuana use on applications regularly, and how you handle these cases can mean the difference between a standard rate and a smoker rate, or between a placement and a lost client.
The landscape is shifting fast, so staying current on carrier positions is one of the highest-value things you can do for your book of business.
State legality versus carrier policy
The first thing to understand is that state legality has almost no bearing on how a carrier underwrites marijuana use. Life insurance carriers operate nationally and set their own risk guidelines independent of state law. A client who uses marijuana legally in Colorado is underwritten the same way as a client in any other state. Carriers evaluate marijuana use as a health and lifestyle risk factor, not a legal one.
This is an important point to communicate to clients who assume that because their state has legalized marijuana, it will not affect their life insurance application. It absolutely can, depending on the carrier and the frequency of use.
How carriers typically classify marijuana use
Carrier approaches generally fall into a few categories. Some carriers treat any marijuana use the same as tobacco use and assign smoker rates. This can double or even triple the premium compared to non-smoker rates, which makes these carriers a poor fit for marijuana users.
Other carriers have adopted more nuanced positions. They may offer non-smoker rates to applicants who use marijuana occasionally, typically defined as a few times per month or less, as long as there is no tobacco use. The exact threshold varies by carrier, but the trend over the past several years has been toward more lenient treatment of occasional use.
A smaller number of carriers have taken the most progressive stance, treating marijuana similarly to alcohol. Under this approach, moderate use is largely a non-issue, and only heavy daily use or use combined with other risk factors triggers a rating.
Medical versus recreational use
Most carriers do not distinguish between medical and recreational marijuana use in a meaningful way. What matters more is the frequency and method of use, and whether the underlying medical condition being treated with marijuana introduces its own underwriting considerations.
For example, a client who uses medical marijuana for chronic pain may face more scrutiny around the chronic pain diagnosis itself than around the marijuana use. An agent who understands this can help frame the case appropriately.
THC testing and disclosure
Most paramedical exams include a urine test that screens for THC. If a client tests positive for THC but did not disclose marijuana use on the application, that creates a much bigger problem than the marijuana use itself. Non-disclosure is a red flag for underwriters and can lead to a decline based on credibility concerns rather than the substance use.
Always advise your clients to be honest on the application. If they use marijuana, even occasionally, they should disclose it. You can then match them with a carrier whose guidelines are favorable to their usage pattern. A disclosed occasional user placed with the right carrier will get a far better outcome than a non-disclosed user who tests positive.
THC can remain detectable in urine for different periods depending on frequency of use. Occasional users may test clean after a few days, while daily users may test positive for several weeks. Clients should be aware of this, but you should never advise a client to abstain solely to pass a test while being dishonest on the application.
Frequency matters more than anything
When positioning a marijuana case, the single most important factor is how often the client uses. Most carriers that offer favorable marijuana guidelines draw the line based on frequency. Occasional use, generally a few times per month or less, is viewed very differently from daily use. Daily heavy use is more likely to result in smoker rates or a rated policy, even with carriers that are otherwise lenient.
During your client intake, ask specifically about frequency and method. Edibles and occasional smoking are typically viewed the same way, but the frequency detail is what you need to match the case to the right carrier.
How to place these cases
The key to placing marijuana cases successfully is knowing which carriers in your portfolio have favorable guidelines. This changes over time as carriers update their underwriting manuals, so checking periodically or working with a brokerage general agency that tracks carrier positions is valuable.
When you have a marijuana user, start by determining the frequency of use and whether there is any concurrent tobacco use. Concurrent tobacco use almost always results in smoker rates regardless of the carrier. For marijuana-only users, identify the carriers that offer non-smoker rates for the client's usage level, and submit to the one with the best overall fit for the client's full health profile.
Pre-screening or informal inquiries can be especially useful here, since carrier guidelines on marijuana are not always publicly detailed and can involve underwriter discretion.
The bottom line
Marijuana use is no longer an edge case. It is a mainstream disclosure that you will encounter frequently. The agents who place these cases well are the ones who know their carriers, ask the right questions, and match the case to a carrier whose appetite fits. Avoid defaulting to carriers that assign smoker rates when better options exist.
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