We are a consumer just like you and want the best rates for our client’s life insurance! Listed below you’ll find the do’s and don’ts’ in “The Stoner’s Guide To Buying Life Insurance” we hope you enjoy!
Everyone loves a good “life hack,” or a good arsenal of tips and tricks to make life a little easier – especially for the more arduous life tasks.
Take, for example, buying life insurance. We know that as an independent shopper, the process of slogging through hundreds of insurance companies and filling out quote form after quote form is not a fun or easy task.
The hardest part of looking for a suitable policy is figuring out which options are right for you. This is especially true for the marijuana smokers among us.
If you are a marijuana user and are looking for life insurance, look no further! We’ve compiled your “Life Hack for Life Insurance” cheat sheet right here.
Not a smoker? Not a problem! The best thing about many of these tips and tricks is that anyone can use them to find the best life insurance out there for their needs. Let’s get started, shall we?
The Stoner’s Guide To Buying Life Insurance
As with every good guide, there are certain “dos” and “don’ts” you should follow in order to achieve the best results. As you’re looking through our guide, it is important to note that all life insurance risk is assessed on an individual basis, so what works for one individual may not work for you based on your situation. The guidelines listed below indicate suggestions for finding the best policy out there.
Your first step to getting life insurance is to understand why you need life insurance. What is it, what does it do, and why do you need it?
Do #1: Know The Basics
Life insurance is designed to protect your loved ones and your assets when you are no longer around to do so. It comes in several different forms, but the main two are whole life insurance and term life insurance.
Whole life insurance refers to life insurance that is purchased and belongs to the insured for the duration of their lifetime. This type of life insurance accrues a cash value over time, which can be used to pay off your premiums or can be borrowed. The downside to this type of life insurance is that the premiums are often expensive and the death benefits are low.
Term life insurance refers to a policy bought for a specific number of years. These policies are often less expensive than whole life insurance policies, and their death benefits are larger.
Life insurance’s function is relatively simple: you purchase a policy and pay a set premium for a specified period of time. Should you pass away within that time period, your death benefit will go to your beneficiary, usually a spouse or a loved one. This benefit can be used to pay any debts, medical expenses or funeral costs. Essentially, the policy is designed to replace your income in the event of your death.
Life insurance can be beneficial at any age; however, as you age you might find it harder to find an affordable policy. This is because life insurance policies prices are based off your risk. Which brings us to:
Do #2: Know Your Risk
Underwriters are individuals who have the rather daunting job of evaluating the mortality risk of an insurance applicant. Your mortality risk is your lifespan compared to the average individual’s.
For example, if you are a professional bungee jumper, the chances of you passing away are greater than, say, a teacher. Your professions, hobbies, lifestyle choices and health are all looked at when your risk is being assessed.
If you smoke marijuana, you’ve automatically increased your risk compared to the average, non-smoking person. So, reasonably, you can expect to pay more for your life insurance coverage.
Risk is divided into four classes:
- Preferred: This category is associated with excellent health and low risk compared to the average individual. This category has the lowest premiums.
- Standard: If you fall into this category, you are the average person! All other categories are judged against this one. This means your mortality rate is roughly the same as the average individual’s.
- Substandard risk ratings mean the applicant is taking on more risk than the average individual. This could be due to health reasons or certain lifestyle choices. The premiums in this category will be more expensive than the previous two.
- Declined: If you are declined for coverage, this means that you posed too great of a risk for the carrier to cover you. Bonus tip: never take no for an answer! If you’ve been declined, we recommend looking around a little more, as some carriers might be able to provide you coverage.
Those are the standard risk classes used by standard insurance underwriters. Now, if you happen to have a high-risk job or hobby, you will want to seek out high risk life insurance, as the premiums and policies will often be better suited to your lifestyle.
If you are a marijuana smoker, you have the luxury of either seeking out standard or high-risk smoker life insurance. The premiums for smokers insurance will often be higher than for non-smokers Life insurance premiums for smokers fall into two categories:
- Preferred Smoker, which could indicate an occasional cigar/cigarette/marijuana user in otherwise excellent health.
- Standard Smoker: This is someone who would fall into the standard category, except with the added risk associated with being a smoker. These individuals are usually in standard health and pose little-to-no risk outside of their smoking habits.
Knowing your risk as a marijuana smoker can be tricky, but there is good news! Many insurance companies are now creating underwriting guidelines with marijuana smokers in mind, and a lot of these companies are giving lower non-smoker ratings to marijuana users.
So, how do you know your risk? Well, you don’t. Each company and underwriter is going to rate you differently based on a picture of your overall life. Nobody fits perfectly into any one of these categories, so in order to know your risk you’re going to have to seek the help of an expert.
Do #3: Get Help
Life insurance is not easy to understand, particularly when you take into consideration the fact that carriers all view risk differently.
When shopping for life insurance, we recommend seeking out an independent agent. Think of an agent as your ultimate life insurance “life hack.”
Independent agents are experts in the industry and forge relationships with a multitude of different carriers. As a result, they don’t work for any one carrier, and can work with your best interests in mind. The best news is that an agent can assess your risk better than you can.
How, you ask? Because agents are experts in their field, they are well-versed in how underwriters think and view risks – especially risks associated with marijuana use.
Additionally, the connections these agents forge with a variety of companies allows them to quickly and easily present you with the carriers that have successfully worked with cases similar to yours. This paints an overview of which risk class you can expect to fall into, and what you can reasonably expect your premiums to cost.
Additionally, agents can help you avoid the rookie mistakes of the “don’t” list, mistakes that could cost you hundreds of extra dollars per year.
If you’ve followed the “dos” so far, then you probably don’t have to read any further. However, if you are a first-time insurance buyer or you are high-risk, read on for some pitfalls you should avoid.
Don’t #1: Overpaying for Life Insurance
One of the beginning steps toward finding a life insurance policy is sitting down with your bills and expenses and calculating how much money your family would need if you were to pass away. If your tendency is to buy the biggest policy you can, you’re not alone. After all, everyone wants to be able to provide for their families and loved ones.
The problem with buying a huge policy is that you will be paying for a policy your family won’t use. A life insurance policy’s purpose is to replace your lost income until your family can get back on their feet. This means calculating loans, debts, mortgage and your income over a set period of time, to find a number that meets, rather than exceeds, your needs. This keeps your premiums low and ensures that your family will have adequate financial protection.
A life insurance agent can help you and your spouse or loved ones calculate the best policy size for your family.
Don’t #2: Buying the wrong type of insurance.
Two costly mistakes are commonly made when shopping for life insurance: (1) choosing guaranteed issue life insurance; and (2) buying whole life insurance.
Guaranteed issue life insurance policies are the fool’s gold of life insurance policies. These policies promise that anyone can be insured, no matter their risk. These policies lure shoppers in with the promise of fast coverage, with no medical exam.
If you are reading this as a marijuana smoker, this might be appealing to you; however, if there is one thing you take away from this article, it should be that you are almost always better off undergoing a medical exam for life insurance. This is because carriers view risk differently, so there are companies out there to suit a multitude of needs, no matter the risk.
Additionally, if there is no medical exam, then there are no risk classifications. This means that you could be paying the premiums of someone with a much higher risk rating than your own – and for a smaller benefit!
More money, less coverage is also why we don’t recommend whole life insurance. The promise of building cash value within the policy may be appealing, but this value can take years to accrue, and you can expect high premiums and a low death benefit.
Don’t #3: Lying on your exam.
The easiest way to get declined for insurance coverage and reported for insurance fraud is to lie to your agent or your underwriter. Trust us when we say: you will not get away with it.
Your blood or urine will be tested for marijuana during your medical exam. Additionally, you will be tested for the presence of nicotine and cotinine, a byproduct of tobacco smoke. By communicating your smoking habits to your agent up-front (including frequency), he or she will be able to direct you to the underwriters who will insure your situation.
Don’t #4: Smoke Before An Exam!
Your best bet for finding affordable life insurance is to cut back on the smoking altogether prior to a life insurance exam.
Honesty may be the best policy, but that doesn’t mean you should continue to light up in the weeks leading up to a medically underwritten examination. Abstaining from smoking prior to your exam could save you hundreds of dollars each month!
The best advice we can give is to be patient. A lot of research still needs to be done concerning the effects of marijuana smoke and, as America’s attitude toward marijuana changes, you can expect that insurers will keep up.
There is a life insurance option out there for everyone. To find the carrier for you, give us a call today.