In October 2018, Canada legalized adult-use recreational cannabis across the country. This was an exciting decision for many people who relied on the substance for its medicinal benefits and/or enjoyed using it recreationally.
In 2019, the percentage of Canadians who used cannabis grew from 14% to 17%.1As a growing number of people use this substance, it’s important to understand how life insurance providers treat those who use cannabis. As the cannabis landscape changes due to legalization, there are some changes to how life insurance providers are underwriting policies for cannabis users. Discover how you can continue to protect your loved ones financially even if you use cannabis.
What is Cannabis?
Derived from plants, cannabis is a psychoactive drug often used for its therapeutic benefits. It can be consumed in many ways and comes in a variety of forms such as dried flower, edibles, oils, and more.
Life Insurance and Cannabis
Since cannabis legalization, many life insurance providers have changed their underwriting practices to be inclusive of cannabis users.
However, it’s important to do your homework since every life insurance provider constitutes a “smoker” differently based on their underwriting guidelines. Depending on certain factors, some cannabis users may be considered low risk while others may be high-risk, thus affecting how much their premiums will be.
Research on the long-term health effects of cannabis-use aren’t conclusive. This contrasts with smoking tobacco which has strong links to negative health outcomes.
Prior to legalization, many life insurance providers classified cannabis users and tobacco users indistinguishably as “smokers.” This classification may have caused premiums to be high for both groups.
After legalization, many life insurance providers have taken a more liberal stance on cannabis. Depending on several factors, they may not treat cannabis users as “smokers” anymore. Although, in order to be considered cannabis, the products being used must not contain tobacco or nicotine.
This has led to lower premiums for light to moderate cannabis users who are classified as “non-smokers.” Yet, it’s important to know that for those that engage in high cannabis usage, “smoker rates” can apply or be fully declined for coverage in conjunction with other health conditions.
Factors That May Affect How Life Insurance Providers Treat Cannabis Users
Life insurance providers may classify a customer’s cannabis use based on these factors:
Cannabis comes in a variety of forms which can be smoked, sipped, or chewed. Therefore, life insurance providers may underwrite policies based on the ways in which a person uses cannabis. For instance, some life insurance providers may consider the use of edibles or cannabis oils as habits of “non-smokers” while others may consider those forms as part of using cannabis.
Often life insurance providers want to know how many times a person uses cannabis per week. Considered as part of this frequency is the amount of times you smoked, sipped or chewed on the substance.
For some life insurance providers, cannabis use between two to four times per week is considered “non-smoker” behaviour, which may result in lower premiums. In contrast, any frequency beyond this, can designate you a “smoker”, a label that may come with a higher premium.
The amount of the substance used during each session may be considered by some life insurance providers. Although, few insurers stipulate how the amount used per sitting affects premiums.
Depending on the life insurance provider, if you have a history of cannabis use this can affect your ratings and therefore your eligibility to qualify for affordable life insurance. The history of cannabis use will be considered as it relates to the overall health of the insured life.
Factors Considered in Combination and Relation to Cannabis Use
Several other factors may be considered by life insurance providers in relation to cannabis use. Overall lifestyle, mental health history (i.e. depression), occupation, and other conditions are weighed into co-morbidity. For instance, lung disease and other lung conditions may be relevant for frequent cannabis use when smoking.
Medical Cannabis versus Recreational Cannabis
Are medical cannabis users treated differently from recreational cannabis users? For medicinal use, life insurance providers will consider which medicinal products are being used and which condition is it being used to treat. This is then factored into underwriting a policy.
Recreational users of cannabis can expect their life insurance policy to be determined by the frequency of consumption and health conditions which may be weighed more greatly in conjunction with cannabis use.
Life Insurance Options
When applying for life insurance, it’s important to disclose any history of cannabis use or regular activity of cannabis use. If responses aren’t completely truthful, you risk your loved ones not receiving the death benefit at the time of the claim. For instance, if a life insurance provider discovers undisclosed cannabis usage in doctors’ notes or medical history, this could jeopardize the claim.
Traditional life insurance
The traditional life insurance application process involves medical tests and exams. To test cannabis use, a life insurance provider will rely on urine and blood tests. This lengthy process may take weeks or even months for the person to be issued a policy.
No medical life insurance
No medical life insurance involves some health-related questions, some of which may include your experience with cannabis products. There are no medical exams or tests (no drawing of fluids). The application process is straightforward, and your policy can be issued in just a few days.
Canada Protection Plan offers No Medical and Simplified Issue Life Insurance, a life insurance option that can provide coverage to those who have previously used or continue to use cannabis.