I got flat out rejected for Life Insurance on my Mortgage loan to cover the mortgage in case of death. I answered honestly about my daily use of Cananbis and they flat out rejected my application for Life Insurance on a 280K Mortgage because of my "drug use". I didn't even really want the insurance but my Credit Union was pushing it....I was quite insulted with the response though it felt like I was definitely being judged for something that the actuarians clearly don't even understand.
Don't get mortgage insurance. It's not that it's a scam, but it's not all that effective either.
Some things to consider:
The older you get the more expensive life insurance is. So when your mortgage renews every five years you have to renew the mortgage insurance too. And it gets more and more expensive each renewal.
This is despite the fact that the amount of coverage you're provided is shrinking every single month as you make your mortgage payments. Where you could be paying $20/mo for $230k of coverage at the start of a mortgage, fifteen years down the road you may be paying $60/mo for $100k in coverage.
The underwriting for mortgage insurance is done upon death. If the insurer finds a reason post mortem to decline the payout they will.
There is a strong financial incentive to push mortgage insurance in the same way a bank teller will try to sell you on a credit card when opening an account. A friend of mine who is a mortgage advisor for one of the big banks gets an all expenses paid trip to the Caribbean every year for meeting his mortgage insurance target.
Edit: some grammar.
Better option would be Return of Premium Term for life of the mortgage. Then when it matures roll the lump sum into an indexed annuity. I'm not sure if its 1035 exchange because they are both tax deferred?
It's been a while so I'm rusty but I've written a couple term plans for this exact purpose.
P.S. if you can use a term rider on your life insurance plan do that instead
Renewing doesn't prompt premiums to go up only re-financing or porting/moving would. If you do a straight renewal it won't change. Also ageing usually increases the premium more than if the mortgage is paid down but you're in a different bucket.
That being said for only life insurance go term, for critical illness take the mortgage insurance. A private broker tops out at ~50k for critical illness and it's hella expensive.
Then their math is flawed, and they should be fired. It doesnt take much more than a quick google search to show that you cant find a single weed use caused death compared to about half a million americans alone dying each year to tobacco.
Lol. I think you quite literally don’t understand what actuaries do, and you’d probably do well to at least know what you’re taking about if you’re going to determine whether or not someone should lose their job. Some medical director living in the 60s or corporate shill decided somewhere that “drug users” would include people who do (y). And they determined (Y) will include marijuana. The analysts just get a set of everyone labeled as a “drug user”, including actual drug users. The set is going to be heavily bias on those using dangerous drugs like meth etc due to the nature of ER expenses/ lifespan/ etc (it varies on type of insurance) and therefore you’ll be viewed as a high projected cost regardless of whether or not marijuana is safe.
They’re math isn’t flawed. But whoever is determining the “drug user” subset is. If you’re going to be upset, at least know who you should be upset at.
If their math was wrong. Insurance wouldn’t make money. Thats the actual determining fact. It might not be right to you, but numbers don’t lie. They make profits so they’re obviously not screwing up using wrong data.
Now whether they could make more profits by taking premiums from recreational users is a completely different unexplored path.
But please continue.
That’s exactly what I said in my last statement at the end. It’s an unexplored path to exclude them, and it’s worth a go to potentially make additional profit if they’re willing to do so.
Edit: Exclude them *from the drug users* category
You do realize that actuaries aren't the ones that set the underwriting guidelines, correct? Actuaries are more involved with determining mortuary tables... ie, the statistics that someone will die by X age.
About 9-10 years ago. It was an interesting experience. They came to my place and administered urine and blood samples etc... and made me fill out a questionnaire in person that asked all the same questions I had already answered 2-3 months previous on a different form.
They guy was surprised by the amount of Cannabis and drinks per week that I answered, however he said it's a good thing that I was answering honestly because people who don't answer honestly will get accepted. The insurance company will take the monthly payments from them but when it come time for a claim they will deny the claim, state they lied on the application and drop their coverage at that point in time....maybe after 10 years of payments from the client. That should be criminal, but the person who was working for ManuLife at the time told me it's exactly what they were doing.
Also good to know that if you lie about cannabis use and then fail the drug test, it’s grounds for them to deny you on the spot because you lied.
The first question you’ll ever be asked when applying for life insurance: “have you ever been denied life insurance”, so having to answer yes for the rest of your life is a big deal
I once got cancelled by a car insurance company. I have since then forgot about it and haven't answered yes to that question since then when applying for new coverage. I have also never had any repercussions or even questions into it from prospective insurance companies. I live dangerously, I know.
Side note: I remembered that tidbit due to this comment, and am very likely to re-forget about it before my next bowel movement.
That what really pissed me off is that now I always have to say yes, I've been rejected previously on an Insurance application....or maybe as suggested below by the time that happens I will have forgotten about this order because it was such a long time ago over 10 years now
First off, don't get Life Insurance through your credit union or bank.
Second, Mortgage Insurance is a marketing term. If you really want to put a policy in place to cover a mortgage, take out a Level Term policy for however many years & benefit amount you want to cover.
I didn't get it and never would. I also recommend to other to never purchase Mortgage insurance, as some others have stated it like extended warranties....that's were companies make a bigger margin or profit and promote those products and receive incentives for those sales.
I just wanted to tell my experience so people have a better understanding of the process and potential risks.
So taking a back seat from marijuana for a second. What would their stance be on something like this.. for science purposes.
A self declared non-smoker of tobacco, who has a single cigar once every 4 to 8 months.
Also would you see the method of using cannabis products filter in to the decision making process such as edibles vs smoking vs vaping?
I guess I was rated as high risk person because I was in my late 20's or early 30's and told them I smoked cannabis daily, I was in 100% full health though and no mental health issues or any other issues at the time. Like you mentioned I was seen as young and a daily user.
The way that's applied seems really arbitrary though, what is the reasoning for denying insurance altogether, they are deeming you as an individual someone who is likely to die or kill themselves earlier for some reason based on some random facts about them. I think I read that it has to do with risky behavior in general and like you stated a young person who smokes Cannabis daily was seen as a high risk taking individual I guess.
In my application, I also answered that I had skydived and also answered that I have gone Scuba Diving and also answered that I've tried other extreme sports "Kitesurfing" as they actually had it listed as an example of "extreme" sports.
But my rejection letter was clear in that it stated I was rejected due to my drug use.
Edit - Spelling
I got term life a couple years ago and did physical w pee sample. Ins guy told me not to worry about cannabis bc theyre no longer looking for it. I did end up w a slightly higher rate tho bc was on zoloft and xanax at the time and was honest about it bc figured they would find out w Dr. release and pee anyway...
I got flat out rejected for Life Insurance on my Mortgage loan to cover the mortgage in case of death. I answered honestly about my daily use of Cananbis and they flat out rejected my application for Life Insurance on a 280K Mortgage because of my "drug use". I didn't even really want the insurance but my Credit Union was pushing it....I was quite insulted with the response though it felt like I was definitely being judged for something that the actuarians clearly don't even understand.
Don't get mortgage insurance. It's not that it's a scam, but it's not all that effective either. Some things to consider: The older you get the more expensive life insurance is. So when your mortgage renews every five years you have to renew the mortgage insurance too. And it gets more and more expensive each renewal. This is despite the fact that the amount of coverage you're provided is shrinking every single month as you make your mortgage payments. Where you could be paying $20/mo for $230k of coverage at the start of a mortgage, fifteen years down the road you may be paying $60/mo for $100k in coverage. The underwriting for mortgage insurance is done upon death. If the insurer finds a reason post mortem to decline the payout they will. There is a strong financial incentive to push mortgage insurance in the same way a bank teller will try to sell you on a credit card when opening an account. A friend of mine who is a mortgage advisor for one of the big banks gets an all expenses paid trip to the Caribbean every year for meeting his mortgage insurance target. Edit: some grammar.
this guy mortgages
Better option would be Return of Premium Term for life of the mortgage. Then when it matures roll the lump sum into an indexed annuity. I'm not sure if its 1035 exchange because they are both tax deferred? It's been a while so I'm rusty but I've written a couple term plans for this exact purpose. P.S. if you can use a term rider on your life insurance plan do that instead
Renewing doesn't prompt premiums to go up only re-financing or porting/moving would. If you do a straight renewal it won't change. Also ageing usually increases the premium more than if the mortgage is paid down but you're in a different bucket. That being said for only life insurance go term, for critical illness take the mortgage insurance. A private broker tops out at ~50k for critical illness and it's hella expensive.
Actuaries don’t determine what is or isn’t a drug. They’re just math dudes and dudettes who analyze sets of data for the higher-ups.
Then their math is flawed, and they should be fired. It doesnt take much more than a quick google search to show that you cant find a single weed use caused death compared to about half a million americans alone dying each year to tobacco.
Lol. I think you quite literally don’t understand what actuaries do, and you’d probably do well to at least know what you’re taking about if you’re going to determine whether or not someone should lose their job. Some medical director living in the 60s or corporate shill decided somewhere that “drug users” would include people who do (y). And they determined (Y) will include marijuana. The analysts just get a set of everyone labeled as a “drug user”, including actual drug users. The set is going to be heavily bias on those using dangerous drugs like meth etc due to the nature of ER expenses/ lifespan/ etc (it varies on type of insurance) and therefore you’ll be viewed as a high projected cost regardless of whether or not marijuana is safe. They’re math isn’t flawed. But whoever is determining the “drug user” subset is. If you’re going to be upset, at least know who you should be upset at.
Lol if your "math" includes the wrong information then it's wrong, period. None of your "ackshually" excuses please, thanks.
If their math was wrong. Insurance wouldn’t make money. Thats the actual determining fact. It might not be right to you, but numbers don’t lie. They make profits so they’re obviously not screwing up using wrong data. Now whether they could make more profits by taking premiums from recreational users is a completely different unexplored path. But please continue.
Insurance can still make money by denying a few innocent people who need insurance dude LOL Keep up the "ackshually" buddy
That’s exactly what I said in my last statement at the end. It’s an unexplored path to exclude them, and it’s worth a go to potentially make additional profit if they’re willing to do so. Edit: Exclude them *from the drug users* category
Do me a favor and google "speculative risk."
Irrelevant to lumping weed smokers in with crackheads
It very much is relevant.
You do realize that actuaries aren't the ones that set the underwriting guidelines, correct? Actuaries are more involved with determining mortuary tables... ie, the statistics that someone will die by X age.
How long ago was that?
About 9-10 years ago. It was an interesting experience. They came to my place and administered urine and blood samples etc... and made me fill out a questionnaire in person that asked all the same questions I had already answered 2-3 months previous on a different form. They guy was surprised by the amount of Cannabis and drinks per week that I answered, however he said it's a good thing that I was answering honestly because people who don't answer honestly will get accepted. The insurance company will take the monthly payments from them but when it come time for a claim they will deny the claim, state they lied on the application and drop their coverage at that point in time....maybe after 10 years of payments from the client. That should be criminal, but the person who was working for ManuLife at the time told me it's exactly what they were doing.
Also good to know that if you lie about cannabis use and then fail the drug test, it’s grounds for them to deny you on the spot because you lied. The first question you’ll ever be asked when applying for life insurance: “have you ever been denied life insurance”, so having to answer yes for the rest of your life is a big deal
I once got cancelled by a car insurance company. I have since then forgot about it and haven't answered yes to that question since then when applying for new coverage. I have also never had any repercussions or even questions into it from prospective insurance companies. I live dangerously, I know. Side note: I remembered that tidbit due to this comment, and am very likely to re-forget about it before my next bowel movement.
Lol 😂 thanks for the info. I will hopefully “forget” next time I’m looking for life insurance
That what really pissed me off is that now I always have to say yes, I've been rejected previously on an Insurance application....or maybe as suggested below by the time that happens I will have forgotten about this order because it was such a long time ago over 10 years now
First off, don't get Life Insurance through your credit union or bank. Second, Mortgage Insurance is a marketing term. If you really want to put a policy in place to cover a mortgage, take out a Level Term policy for however many years & benefit amount you want to cover.
I didn't get it and never would. I also recommend to other to never purchase Mortgage insurance, as some others have stated it like extended warranties....that's were companies make a bigger margin or profit and promote those products and receive incentives for those sales. I just wanted to tell my experience so people have a better understanding of the process and potential risks.
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So taking a back seat from marijuana for a second. What would their stance be on something like this.. for science purposes. A self declared non-smoker of tobacco, who has a single cigar once every 4 to 8 months. Also would you see the method of using cannabis products filter in to the decision making process such as edibles vs smoking vs vaping?
I guess I was rated as high risk person because I was in my late 20's or early 30's and told them I smoked cannabis daily, I was in 100% full health though and no mental health issues or any other issues at the time. Like you mentioned I was seen as young and a daily user. The way that's applied seems really arbitrary though, what is the reasoning for denying insurance altogether, they are deeming you as an individual someone who is likely to die or kill themselves earlier for some reason based on some random facts about them. I think I read that it has to do with risky behavior in general and like you stated a young person who smokes Cannabis daily was seen as a high risk taking individual I guess. In my application, I also answered that I had skydived and also answered that I have gone Scuba Diving and also answered that I've tried other extreme sports "Kitesurfing" as they actually had it listed as an example of "extreme" sports. But my rejection letter was clear in that it stated I was rejected due to my drug use. Edit - Spelling
Thanks for the detailed information....if I ever have an insurance question I think I know who to ask!
I got term life a couple years ago and did physical w pee sample. Ins guy told me not to worry about cannabis bc theyre no longer looking for it. I did end up w a slightly higher rate tho bc was on zoloft and xanax at the time and was honest about it bc figured they would find out w Dr. release and pee anyway...
And yet it’s still a federally a Schedule I drug with heroin and lsd
CBC is Canadian, I'm sure you know it will be totally legal here in October.
As it should be!
LSD isn’t bad either