Anyone trying to get life insurance should be ready to answer a loaded question: Do you smoke pot?

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marijuana smoking legalLuisina Mezquita smokes a joint of legal marijuana she just bought at a pharmacy in Montevideo, Uruguay, Wednesday, July 19, 2017. Marijuana is going on sale at 16 pharmacies in Uruguay, the final step in applying a 2013 law that made the South American nation the first to legalize a pot market covering the entire chain from plants to purchase.Matilde Campodonico/AP

  • Life insurance isn't terribly expensive, on average, but rates vary depending in part on your health.
  • Most people need to undergo a medical exam to take out a life insurance policy. Smoking cigarettes or marijuana - even if it's legal in your state - can negatively affect a health assessment.
  • Smokers can pay two to three times more for life insurance than non-smokers, says Logan Sachon, insurance editor at Policygenius, but it may still be worth it to have protection and peace of mind.
  • Ask yourself a simple question to decide whether you need life insurance: Does anyone rely on your income for their financial well-being?
  • Visit BusinessInsider.com for more stories.

How much life insurance costs depends, in part, on the status of your health.

Most people need to undergo a medical exam during the underwriting stage of buying life insurance. The good news is it's usually free. This helps the insurance company determine a person's risk level, and thus, their premium. A bad health assessment will lead to higher rates, and vice versa.

There's one habit shared by more than 34 million Americans that has a profoundly negative impact when it comes to paying for life insurance, according to Logan Sachon, insurance editor at Policygenius.

Considering life insurance? Compare plans and rates with our partner Policygenius »

"Being a nicotine user is one of the quickest ways to raise your life insurance rates. Smokers can pay two to three times more than nonsmokers," Sachon told Business Insider.

Life insurance isn't terribly expensive to begin with; it's typically worth the protection and peace of mind it provides. The average person can expect to pay between $300 to $400 a year - or just $25 to $33 a month - for life insurance, according to Policygenius.

But it's not only cigarettes that increase rates. Vaping, smoking-cessation products, like nicotine gum, and even marijuana are considered, too.

"As for marijuana use: Carriers view it the same whether you live in a state where it's legal or not, and your rates can go up even if you're using it legally," Sachon wrote in an email to Business Insider. "That said, marijuana and smoking rules vary greatly between carriers, so it's important to work with a broker who can shop your application around to find the best rates for your health profile."

Calculate your own estimated life insurance needs with SmartAsset's free calculator:

 

And if you think you can hide a smoking habit from your insurance company, think again. According to Policygenius, most medical exams require a urine and/or blood test, which will reveal nicotine or THC usage. Even if you smoke infrequently, it's still best practice to be honest. Insurers can review medical records to uncover the truth, which could result in decline of coverage or cancellation of your policy down the line.

Most life insurance policies also have a contestability period, according to Policygenius. This two-year period from the day the policy is activated allows the carrier to review information provided during the application process and potentially terminate the policy in cases of fraud, including lying about drug usage.

Fortunately, it may be possible to get a rate reduction on your policy if you quit smoking for several years, according to Policygenius

Despite higher rates for smokers, term life insurance is still the most affordable type of policy for most people, especially young parents. Term life insurance, unlike permanent life insurance, provides coverage for a fixed amount of time, usually 10, 20, or 30 years, so monthly payments are cheaper than a policy that lasts indefinitely.

But not everyone needs life insurance. Policygenius boils it down to a simple question to decide whether you need it: Does anyone rely on your income for their financial well-being? That could be children, a spouse, aging parents, or anyone else who could be considered some level of dependent. If someone else relies on your income, then you probably need life insurance.

Does someone else rely on your income? Get an idea of your life insurance options with our partner Policygenius »

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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