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August 5, 2021 Article 4 min read

Years ago, certain diseases or marijuana use would have been instant impediments to reasonably priced life insurance. Today’s medical advancements, current actuarial mortality expectations, and evolving social norms have changed that. Here’s what you need to know.

Couple sitting at a kitchen table reviewing information on a notepad.The COVID-19 pandemic has led many people to recognize the importance of life insurance in helping protect loved ones and business partners in the event of an untimely death. However, some erroneously believe they’re unable to obtain a reasonably priced life insurance policy due to a challenging medical history or certain lifestyle choices.

Years ago, applicants with a history of cancer, diabetes, or marijuana use would have been unable to obtain life insurance at reasonable prices. But today, with medical advancements, new medications, and current actuarial mortality expectations, things have changed.

It’s important to recognize that life insurance pricing isn’t based solely on health. Factors such as driving record, criminal history, and avocation history are additional components. However, health has been — and likely will continue to be — the primary focus.

A history of cancer causes many to automatically believe they can’t obtain life insurance or, if they can, only at very high prices. Fortunately, that isn’t always true. Those diagnosed with lower-stage cancer and have been in remission will generally have a better chance to qualify for life insurance at a very good health rating and attractive pricing. This is especially true if they were diagnosed with a non-invasive form of cancer (Stage 0) and have remained cancer-free for several years.

A history of cancer causes many to automatically believe they can’t obtain life insurance or, if they can, only at very high prices.

As for those who may be in remission after being diagnosed with a more invasive form of cancer, it’s still possible to qualify for life insurance but health ratings will more likely be impacted. You’ll probably need to pay a little bit more, but it can still be affordable. Just remember: typically, the longer you’ve been cancer-free,  the easier it is to get attractively priced life insurance.

Diabetes is another ailment that causes many to feel life insurance is an impossibility. The reality is some life insurance companies specialize in people with diabetes. One such company actively markets to diabetics and has a solution designed for those living with it. If you have diabetes, it doesn’t mean you can’t protect your family or your business by having to live without well-priced life insurance.

What about COVID-19? The impact of COVID-19 varies from one insurance company to the next, with some being more lenient than others. If you’ve been diagnosed with COVID-19, insurance companies generally will postpone your case for at least 30 days – perhaps longer if additional time is needed for a full recovery. If you were diagnosed with COVID-19 and were hospitalized and/or hospitalized and ventilated, insurance companies may postpone your case for 180 days or longer before they’ll consider it.

The impact of COVID-19 varies from one insurance company to the next, with some being more lenient than others. 

Marijuana is increasingly becoming legal in many states for recreational use. Interestingly, marijuana use doesn’t necessarily result in “smoker” pricing (which is extremely high and often unaffordable). Most who use marijuana will usually fall into one of three groups: 

  • Group 1: Those who rarely use marijuana and are worried their recent use may remain in their system during their life insurance examination. This group uses marijuana on a very limited basis each year. They want to be confident that limited use is not going to impact their life insurance application negatively.
  • Group 2: Those who use marijuana somewhat regularly for recreational purposes and haven’t applied for a medical marijuana card. It may be possible for this group to qualify for an excellent health rating, but an average rating is more likely.   
  • Group 3: Those who frequently use marijuana and have a medical marijuana card. These cases will often be the most difficult to result in attractive pricing because, in addition to having to account for the frequent use of marijuana, life insurance underwriting must also address the pre-existing medical condition that warranted the medical marijuana card.

Life insurance companies will commonly assess marijuana use based on:

  • Past and current use.
  • Current frequency of use.
  • Whether it has been misused or whether there has previously been abuse of other substances.
  • The applicant’s age.
  • The results of a urine test.

For recreational users of marijuana, common insurance company underwriting results are:

  • Ages 20 and under will typically be declined for life insurance.
  • Ages 21 and over with admission of use and regardless of testing positive for tetrahydrocannabinol (THC) in urine:
    • If three or less uses per week, the insurance company may conclude on a health rating that is above average, resulting in attractive pricing. 
    • If four to six uses per week, the health rating conclusion may be below average but remain affordable.
    • If seven or more uses per week, that would be considered too often and the case would likely be declined.
  • Ages 21 and over without admission of use and testing positive for THC in urine: Insurance companies will decline the case and no policy will be granted.

While securing life insurance may have been impossible in the past due to certain types of diseases and lifestyle choices, that’s not the case any longer. For help working through and assessing your medical history for life insurance purposes, give us a call.