Perhaps the only thing that can make the death of a loved one even more difficult is submitting a life insurance claim and having it denied by the life insurance company. Unfortunately, this happens all-too-often, leaving many families without the life insurance claim payouts they were counting on to cover things after a loved one's death. And these days, one common reason life insurance companies are citing for claim denial is that of marijuana usage as well as other illicit drug use.
The Importance of Disclosure
Interestingly enough, the use of marijuana (at least for medical reasons) is already legal in about half the states in the country. In some states, recreational use has even been permitted. However, life insurance companies still tend to write policies that have strict regulations and exclusions in place when it comes to marijuana use.
Often times, when a person applies for life insurance coverage and is asked about drug use, they will answer that they don't use drugs, even if they use marijuana. Unfortunately, if a person then passes away (especially within the two-year contestability period after taking out the policy), the policy and original application can be heavily scrutinized. If it is revealed that the insured had even a small amount of marijuana in his or her system at the time of death, then this could be considered a misrepresentation on one's application, which can then be used as grounds for denying the claim altogether.
For this reason, it is always in an applicant's best interest to answer honestly about drug use when taking out a life insurance policy. Of course, if a life insurance claim is denied on the grounds that the drug use constituted a breach of policy, it may be worth appealing the claim, particularly if the denial occurred in a state where cannabis is legal for medical or recreational purposes.
Potential Challenges and Appeals
The key to proving that a breach of policy was made, the insurance company will need to prove that the insured either lied on their original application or that the insured was partaking in illegal drug use at or around the time of death. Of course, if you live in a state where marijuana use is legal, then the latter would be difficult to prove. Furthermore, if the initial application for life insurance was answered openly and honestly, then the denial may be successfully appealed and overturned.
The key in fighting any life insurance claim denial—especially one as related to something as complex as marijuana legality—is having a qualified and experienced life insurance lawyer on your side (one with at least 15 years of experience). By working with an experienced life insurance attorney who has handled countless similar cases in the past, you can enjoy the peace of mind in knowing that you're in good hands and that your life insurance attorney is familiar with all the marijuana laws as they pertain to life insurance policies. Our life insurance lawyers will submit a 100-200 legal brief to the insurance company to overturn the denial, and we have prevailed on every single illicit drug claim.
Appealing a claim denial that is related to marijuana or other illicit drug use requires a very specific expertise, which is why consulting with an experienced life insurance lawyer is your best bet. From there, you can ensure the best chances of success in appealing your claim and receiving the benefits as outlined in your loved one's policy.