Over the last six years, psychedelic drugs have gained increasing acceptance in the medical and legal realms as legitimate treatments for mental health conditions like depression and chronic pain. Colorado recently decriminalized psilocybin (a psychedelic produced by mushrooms), DMT, and other plant-derived psychedelics, and California could be next — welcome news for people with mental health conditions that could be treated by psychedelics. But if you’re applying for life insurance while using one of these drugs, you should know that underwriters may not be as quick to accept psychedelics. Life insurance companies follow the research when it comes to new drugs, but will reject your application if there’s any sign of abuse.
How psychedelics are used
Researchers are finding growing evidence that psychedelics can help treat conditions like depression, anxiety, and substance abuse, says Dr. Nathan Sackett, assistant professor in the psychiatry department the University of Washington School of Medicine and director of its Center for Novel Therapeutics in Addiction Psychiatry. The federal Drug Enforcement Agency still considers them Schedule 1 drugs, meaning they have “no currently accepted medical use and a high potential for abuse.” Other schedule 1 drugs include heroin and ecstacy, but also marijuana, which has been approved for medical use in 37 states.
While some states are moving toward decriminalizing psychedelics, the federal government still classifies psychedelic drugs alongside dangerous and addictive substances like heroin. For many people, the only legal way to access substances like psilocybin, LSD, or MDMA to treat their mental health is through research programs.
The push to decriminalize these drugs seems largely driven by public opinion. While they have shown promise as treatments, “the research is still lagging behind” when it comes to identifying how they can be most effective outside of the lab, Sackett says. However, researchers are eager to explore their use as a way to improve existing treatments.
“Large data sets show that only about a third of people will respond to (psychiatric) medications,” Sackett says. Because of the limitations of traditional drugs, some researchers have sought alternatives.
The pandemic led more people to seek mental health treatment, and psychiatrists are struggling to meet the demand. Access is also a problem; even among Americans with health insurance, almost half have had a mental health provider decline their plan, according to the Policygenius 2022 Health Insurance Survey.
“The biggest challenge in psychiatry is our treatments are very limited and people are desperate to get care, not only from the limited effect of the pharmacology we have available, but it’s very difficult to get a psychiatrist or therapist of any sort,” Sackett says.
Can you get life insurance if you take psychedelic drugs?
Abusing drugs can result in an automatic decline if you apply for life insurance. But if peer-reviewed studies continue to show the effectiveness of psychedelic drugs in treating conditions like depression, the insurance industry may begin treating these drugs like any other treatment for depression very soon, says Dr. Steven Rigatti, a medical risk consultant for life insurance companies and former medical director for MassMutual and MetLife.
“Given the recent peer-reviewed studies showing effectiveness of psilocybin in the treatment of depression, I would expect the industry to move rather quickly to treat these drugs, when prescribed by a physician, like any other antidepressant — and to rate as an appropriately treated case of depression,” Rigatti says.
However, as is still the case with alcohol and marijuana, if there’s evidence of drug abuse or addiction, insurance companies will still decline, regardless of the legal status of psychedelic drugs. Even in the case of marijuana, which is legal in a number of states, some life insurance companies continue to charge frequent users more — or even reject their applications. With psychedelic drugs, the dosage for legitimate medical treatment is relatively infrequent, so insurers may see frequent use as an indication of substance abuse.
Life insurance companies are often wary of novel drugs or ways of using them — in Massachusetts, some life insurance companies were accused of discrimination for denying coverage to people who used the anti-HIV drug PrEP. In these cases, the companies will often claim they’re being risk-averse while waiting for data on how these drugs affect mortality. Because of that, someone taking psychedelic drugs to treat depression might have a harder time getting life insurance. And while depression is a common condition for life insurance companies to encounter, a novel treatment like psychedelics “might be taken as an indication that the depression is more severe/resistant than most,” Rigatti says.
“Substance abuse is treated much more harshly, so if there were any indication that a medication was being taken for substance abuse, it would most likely result in a decline, no matter what it was,” he says.
That doesn’t mean you should stop taking psychedelic drugs if your doctor recommends them. Life insurance is important financial protection, but your health is important, too.
This article originally appeared on PolicyGenius.com and was syndicated by MediaFeed.org.
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Tips for comparing life insurance policies
Life insurance is one way to help protect loved ones.
But, with numerous life insurance choices sold in the U.S. market, it can be challenging to pick which policy to go with. There are plenty of details to keep track of — such as getting insurance quotes, understanding payment options and figuring out coverage.
From selecting a reputable insurance provider to estimating an adequate amount of coverage, navigating various life insurance options may feel like wandering through a labyrinth.
Below are tips for comparing life insurance policies and understanding the insurance buying process.
Related: Strategies for building an investment plan for your child
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Before comparing life insurance options, it can be helpful to select the right type of policy. Since choosing the right kind of life insurance policy can be confusing, here are a few guidelines.
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Term life insurance is designed to provide protection for a specific amount of time, usually in 5, 10, 15, 20, 25, or 30 years. Term policies can match the length of time coverage if needed.
For example, if the top priority is providing income for dependents to fund their college, a 20-year policy might be applicable. Perhaps the top priority is the ability for beneficiaries to repay existing debts. In this case, maybe a 25-year policy would make more sense.
One reason buying term life insurance may make sense is if the budget is limited. Generally speaking, term life insurance only pays out if the policyholder dies before the end of the policy term.
One reason buying term life insurance may make sense is if the budget is limited.
So, the rate per thousand of death benefit typically costs less than permanent life insurance policies — which, while more expensive, typically covers a policyholder’s whole life.
With term life insurance, the coverage usually expires when the policyholder lives past the length of the policy. Renewal is possible, but terms and rates may vary based on the applicant’s health and age.
Policyholders who wish to extend their policies may want to contact different providers to determine how lengthening their life insurance terms generally works.
If financial needs change during the term of the life insurance policy, some insurers may offer a convertible policy.
With a convertible policy, policyholders can convert the policy to a permanent policy in exchange for higher premiums. And, with some providers, medical exams are not required for conversion to a permanent policy.
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So, how’s a buyer to recognize the key differences between term vs. whole life insurance?
Permanent life insurance (aka whole life) is designed to provide protection for a policyholder’s entire lifetime.
In other words, the policy will pay a death benefit no matter when the policyholder passes away. For term policies, the benefit is normally paid out only if the death occurs before the end of the covered term.
Permanent life insurance policies may also come with a savings component, which can grow on a tax-deferred basis. Policyholders can use this saving component to borrow funds for a variety of reasons.
The savings component might also be used to pay premiums if making payments on the policy becomes a challenge in the future. Even if a policyholder has less than ideal credit, the funds can still be borrowed against. In that case, the death benefit is considered collateral for the loan.
In practice, this can mean that when a policyholder passes before what’s borrowed against the policy has been repaid, the life insurance company deducts what’s still owed from the beneficiary payout.
There are several other options for permanent life insurance worth, including:
• Whole life insurance. This coverage provides foreseeable lifelong coverage, which includes a fixed premium and death benefit.
• Universal life insurance. This type of coverage provides flexible lifelong protection and several cash accumulation options.
• Variable universal life insurance. This type of coverage offers flexible death benefits and several investment options for the cash accumulation component.
It’s important to note that permanent life insurance is typically more expensive than term life insurance. So, when weighing out the options, the cost might be a crucial factor to calculate.
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There are several different ways to calculate how much coverage is necessary. Some insurers recommend multiplying a policyholder’s salary by 5 to 10 times.
Using a free life insurance calculator can also simplify estimating the cost of different coverages. With online insurance calculators, people shopping for life insurance answer a few questions to estimate the amount of coverage they may need.
Since the 5 to 10 rule of thumb creates results that can vastly vary, it’s essential to account for all the beneficiaries’ anticipated needs. For instance, children may require a higher death benefit than spouse’s because of the anticipated cost of attending college or to cover other educational expenses.
On the other hand, if additional resources or assets are available to the beneficiaries at the time of a policyholder’s passing, a lower coverage amount might make more sense.
When using a life insurance calculator, it’s crucial to include all the debt that beneficiaries or an estate may be responsible for — including shared revolving debt.
It’s important to note that the amount of life insurance coverage that the buyer deems necessary is one major factor that affects how high or low the monthly premiums amounts end up costing.
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After determining the right type and amount of life insurance coverage needed, it’s time to gather life insurance quotes and decide which insurers to look at.
Searching for insurance companies with established financial histories, strong consumer ratings and flexibility of product offerings may increase the policy value.
With this in mind, here are a few things to chew on when selecting insurance companies.
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Several credit rating agencies produce analyses on the financial health and the claims-paying ability of insurance providers.
Rating agencies look at insurance providers’ overall financial strength and their ability to meet existing insurance obligations (i.e., paying out the benefits).
While no rating is guaranteed, buyers may want to review various companies’ ratings when researching who to seek a life insurance quote from.
For example, A+ and A++ are A.M. Best’s superior ratings — representing companies that, according to the agency’s analyses, have shown an exceptional ability to meet their insurance obligations and have evidenced financial strength.
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To obtain a life insurance quote, some providers offer simple online applications. The insurance company can provide an accurate quote by asking potential policyholders to share some personal details — with questions typically covering the applicant’s age, location, gender, health and desired coverage.
Since permanent life insurance policies tend to be more complex, it’s sometimes wise to consult with an agent who can help compare the pros and cons of different life insurance policies.
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Life insurance providers’ underwriters generally determine the cost of each policy. The underwriters look at numerous factors, including applicants’ age, health condition and medical history, to determine the risk for taking on the contract.
While each provider may use similar methodologies, costs can vary depending on the amount of coverage they are willing to give and the price paid by the policyholder.
But, again, the value of the company and the services offered can also play a role in how much a policy may cost.
So, while aiming to get the lowest monthly bill may seem like the right solution, it’s wise to evaluate if that lower-priced option can provide the desired coverage over the life of the policy.
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Customization is one additional factor that people shopping for life insurance may want to keep in mind. Since no two policyholders have the same financial goals or coverage expectations, some insurers offer policies designed to match a given applicant’s specific needs.
For example, insurers may offer different riders or payment plan options to make each policy more customizable to the policyholder’s goals. Insurers who offer more flexibility might be a better fit for some buyers.
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Buying life insurance from a company that offers a wide range of products is not only a convenient way to shop for insurance, but it may help policyholders to save money. Insurance companies at times offer discounts for bundling multiple insurance policies together.
People shopping for life insurance can review the other products each insurance company offers to determine if buying a specific insurer’s bundled policies can save time, money and the potential hassle of working with more than one provider.
For instance, it may be possible to bundle life insurance alongside automobile or rental insurance.
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Since permanent life insurance has a cash value component that can grow over time, it’s important to factor this trait when comparing each policy’s potential value. Although low-cost policies may seem like an attractive option, they may not provide as much coverage over the policy’s life.
For buyers who prioritize cash value and dividend distribution, picking a life insurance policy that offers either or both features may be a good choice. But, keep in mind: Policies with higher dividend payouts are, typically, more costly each month.
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While it’s possible to buy life insurance online, sometimes, it’s wiser to contact an insurance agent. Because different life insurance products come with varying fine print details, an insurance agent could help buyers grasp the key differences between policies and products. Buyers can also ask them any lingering questions.
And, an agent who is well versed in the product’s details can explain important distinctions like cost, coverage limits, varying terms, etc. It’s worth recalling that any insurance agents are paid on commission.
Before a buyer consults with an insurance agent or broker, it can be a smart idea to hone in on exactly how much life insurance is needed and what budget exists to pay for it.
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Life insurance can be one part of financial planning for the future. Comparing life insurance policies may help ensure that loved ones are appropriately protected if a policyholder passes away.
Learn more:
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
Ladder Life term life insurance policy made available through Ladder Insurance Services, LLC (Ladder) and underwritten by Fidelity Security Life Insurance Company, Kansas City, MO. Product availability and features may vary by state. Not available in New York. The California license number for Ladder is OK22568. Policy Form No. ICC17-1069, M01069, Policy No. TL-146.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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