When marijuana became legal across Canada, its impact went beyond the lives of its users. The Cannabis Act, or Bill C-45, that came into effect on October 17, 2018, sent ripples across the life insurance industry as well – there was now one more lifestyle factor to consider in the lives of customers.
Since then, the industry has made adjustments around marijuana and life insurance, from the way they processed applicants to the way they calculated premiums. More importantly, marijuana users have since been able to purchase life insurance policies that match their needs and lifestyle without necessarily having to pay higher, ‘smoker rate’ premiums.
In this piece, we’ll go over those factors – the frequently asked questions, the types of policies available, and the key things you need to think about when shopping around for a life insurance policy as a marijuana user.
Prior to Bill C-45, insurers had already been rethinking life insurance offerings for the cannabis-using set. Public attitudes toward marijuana were shifting, and the number of users was growing. Insurance companies started paying attention as marijuana became a part of more and more people’s lives – and evolve alongside the changes.
So they began to update underwriting protocols. One of the biggest changes was taking marijuana out of the high-risk category that tobacco occupies. Some of the bigger insurance companies started doing this as early as 2016, stating that marijuana users would no longer be charged smoker rates unless they were also using tobacco.
Others distinguished users by the purpose and frequency of their usage. Those who used it no more than twice a week, for recreational purposes, could qualify for non-smoker rates, for example. Those who needed it for medical purposes would have coverage rates to match.
Here are how some of the factors that insurance companies consider when creating quotes for marijuana users.
When applying for a life insurance policy, companies will have to rely on customer disclosure regarding their marijuana use. Most policies require medical exams to back this up, specifically a blood test and/or a urine test, although policies also exist that skip these tests altogether. More on that in a bit.
In addition to medical test results, other factors that come to play are your general health, lifestyle, your family’s medical history, and whether or not you use tobacco as well. Life insurance companies use determinants to identify whether you’re a low-risk or a high-risk policyholder. You're likely considered higher risk and pay higher premiums if you smoke or live with health conditions.
Likewise, marijuana users are classified as low- or high-risk depending on how often they use marijuana; whether they smoke or ingest it; and whether they use it for recreational or medical purposes.
For some insurance providers, there is no difference between smoking a joint or enjoying a magic brownie; whether you do one or the other will yield the same life insurance policy rate and coverage. Other companies, though, are easier on the edibles and will offer a non-smoker rate even if you’re enjoying a weed brownie every day—as long as you keep your weed smoking to two cigarettes or less a week. Cannabidiol, or CBD oil, is less likely to affect insurance premiums.
Recreational marijuana use is typically considered low-risk. Other health factors include histories of mental illness or anxiety disorders – paired with marijuana, these can become greater risk factors. Another area to consider is whether marijuana impairs or affects your driving in any way.
As a rule of thumb: the poorer the health, the riskier the lifestyle, and/or the greater the number of risk factors, the higher the life insurance premiums will typically be.
As a marijuana user, it’s important to pay attention to what an insurance company considers ‘frequent use’.
Some companies peg two joints or less per week as ‘casual’ or infrequent; others have a higher cap of up to four joints per week. More than that and companies will classify you as a regular or frequent user. With that, you carry similar risks as that of a smoker.
That said, there are three types of life insurance policies you can get. The first two are standard life insurance policies with 1) non-smoker or 2) smoker rates.
A fully underwritten policy does require urine or blood samples. While the non-smoker rate is much less expensive than the smoker one, they are both generally affordable for marijuana users. Be prepared to undergo the aforementioned exams and provide a full medical history with either of these. You’ll be paying less for insurance premiums if you're approved on the bright side!
The third option involves no medical exams. They are classified as a 1) simplified issue life insurance, which includes a series of health-related questions but without the medical exam; or 2) guaranteed issue life insurance, which involves no questions or medical exams. Without any underwriting, the risk to the insurance company will be greater, resulting in a more expensive insurance policy – and sometimes even for less coverage. Some non-medical policies also include a ‘no benefits period’, which could look like a full two years before being eligible for any payout should something happen to you.
As we’ve seen, there are options that do not involve taking a drug test when applying for life insurance as a marijuana user.
Going through an underwriting process is required for any non-medical life insurance policies. The full underwriting requires a medical, including a drug test.
Blood tests and urine tests, which are free during your application, can easily identify your usage as a marijuana user. Tetrahydrocannabinol, or THC, is the chemical that shows up in blood between three and 14 days of use, or in urine up to a month after.
These tests are also a way for insurance companies to verify whether or not you’re telling the truth about your usage. That said, it’s important to be honest in your applications. Lying on your application is insurance fraud, and there are implications if you aren't honest, like:
Should the worse happen, your family can also lose out on a payout. Blood and urine tests are not the only ways for them to find out, as they’ll likely request medical records that could also indicate any history of recreational or prescribed marijuana use.
Is marijuana a part of your lifestyle? Here’s an idea of the kind of questions insurers will be asking when you apply for a life insurance policy:
With marijuana’s legalization, it has become part of the fabric of Canadian life. It has also found its place in the insurance landscape, as more and more data emerges and marijuana-related life insurance policies become more sophisticated.
Life insurance brokers can help shop around for the best policy to match your needs and lifestyle. Through PolicyMe, recreational marijuana users can qualify for instant approval, while referrals for an underwriter are specific to those who indicate moderate usage and those who use marijuana medically. With marijuana no longer a crime in the country, let’s not forget to cover our bases and ensure our loved ones are protected in the long run.