As more and more states change their state laws and enforcement related to marijuana use – either recreational or medicinal, marijuana usage is becoming an important factor in disability insurance underwriting. Different carriers take different approaches, so asking your client questions about marijuana usage can help you target the best carriers for the case.
Where Is Marijuana Legal?
According to Pew Research Center, most Americans now live in a place where recreational marijuana is legal on the state level, and nearly three in four Americans live in a state that allows either recreational or medical marijuana. According to the CDC, 24 states, the District of Columbia and two territories have legalized recreational marijuana. Medical marijuana is legal in 47 states, the District of Columbia and three territories.
More and more Americans take advantage of marijuana legalization at the state level. According to Gallup, a 2024 poll found that 15% of Americans say they smoke marijuana, up from 7% in 2013. Working-age individuals are especially likely to use marijuana, with 18% of middle-aged respondents and 19% of young adults admitting to usage.
What About Federal Laws?
Although many states have legalized marijuana for years now, the drug has remained illegal on the federal level. This may be changing. According to AP News, the DEA has proposed a reclassification of marijuana as a less dangerous drug. Currently, marijuana is classified as a Schedule I drug, putting it in the same group as heroin and LSD. Under the proposal, it would be reclassified as a Schedule III drug, like ketamine and certain anabolic steroids.
If this proposal moves forward, it will represent a major shift in the way marijuana is treated in the U.S., and it could prompt more people to try the drug. However, it’s important to remember that legality is not all that matters in disability insurance underwriting. After all, cigarettes are legal, but underwriters still take smoking into consideration. The issue is the impact on health and risk.
Disability Insurance Underwriting for Personal Use
We are getting an increasing number of cases related to clients working in the marijuana industry as well as clients who are using marijuana, either medicinally or recreationally.
The use of marijuana can affect the medical underwriting of a disability application.
- Recreational Marijuana Use: Generally, clients with infrequent marijuana use, in the range of one to three times monthly, can expect no modifications. We have at least one carrier that will still offer coverage with use up to one to three times per week but with a tobacco rating. Most of the carriers would use individual consideration with weekly usage and an inquiry with detailed client information would need to be done before quoting.
- Medical Marijuana Use: Up until very recently, non-medicinal use was viewed as more favorably than medicinal, and it could be difficult to find coverage for medical marijuana users with traditional carriers. However, carriers have changed their tune and are now more willing to underwrite coverage for medical marijuana users.
As the agent, you need to get this type of information on the front end, so there are no surprises once the application is in underwriting.
When preparing a disability insurance application, ask questions about marijuana use:
- Does the applicant use marijuana?
- If yes, is the marijuana use medical or recreational?
- If yes, how frequently does the applicant use marijuana?
Disability Insurance for Marijuana Industry Workers and Business Owners
There are different guidelines for those working in the marijuana industry, and securing disability insurance is more challenging. We typically cannot get individual DI coverage with a traditional carrier. However, we do have options for these clients with a special risk carrier.
We also now have options for business insurance as well such as key person coverage, business loan coverage and buy sell disability insurance. These plans are simplified issue and require no labs. The premiums can also be paid by credit card which is an important option as many of these businesses are unable to obtain checking accounts.
You Don’t Need to Turn Down Clients
You may worry that it will be hard to place insurance for clients who use marijuana or have other high-risk factors, but coverage is available, and DIS can help you find it. Download the No Is Never the Answer resource to learn how you can stand out and grow your business by helping underserved, high-risk and medically impaired workers.
Please contact us if you have any questions about insuring these clients!