You may be feeling frustrated and confused if you were denied the death benefit for a life insurance policy. In certain cases, insurer’s deny claims due to various reasons. Almost all life insurance and accidental death coverages involve exclusions that highlight situations where the insurance company might refuse to pay the death benefit. However, it is also possible for insurer’s to interpret these exclusions in a way that makes almost every death contestable.
One such reason to deny coverage can be the use of illegal drugs? But what happens when the situation involves marijuana? Cannabis is legal in certain states. So, is an insurance company obligated to make a payout if the policyholder was under its influence when they passed away? We answer all such questions and more below.
The most frequent justifications given by insurance companies for declining to pay claims involving marijuana usage are drug exclusions included in accidental death policies and misrepresentations on insurance forms.
People are required to fill out an application and respond to various medical inquiries when obtaining life insurance.
Candidates are required to provide truthful responses on which insurers base their decision to offer policies. Cannabis usage should be revealed if an application question requires you to include your prescription medicine or drug use. An applicant's replies are often accepted as accurate and correct by life insurance firms since they are not legally obligated to conduct an investigation on the insurance buyer's medical history before issuing a coverage.
The insurer will review the policyholder's medical history records to determine if they match with the responses given on the life insurance application if the policyholder passes away within two years of purchasing the policy (also referred to as the "contestability period"). The insurance company may thus regard the insured's usage of cannabis as a substantial misrepresentation if the application did not mention it. As a result, the claim might get rejected.
The outcome largely relies on the state's laws where the insurance coverage was purchased. The refusal should be contested if the regulation was implemented in one of the states where cannabis usage is permitted.
35 states have approved the use of medicinal marijuana. However, there still isn't any guarantee that the insured's use of marijuana for medicinal purposes, even if legal, will not impact a life insurance claim. Life insurance plans frequently refuse to pay out in such circumstances. If the insured did not reveal they use cannabis for medical purposes on the application, you may run into issues while trying to collect their policy's death benefit.
If the policyholder's illicit drug usage contributed or caused their death, the insurer may deny the claim according to the drug exclusion. This exclusion is very broad. It may include almost any case where it can be established that the insured was on drugs when they died. For example if cannabis-infused edibles or cookies caused marijuana intoxication, the insurance company may apply this exclusion and deny the claim.
Our life insurance lawyers fight all delayed and denied life insurance claims including those involving drug exclusions.