Everything You Need To Know About Cannabis & Life Insurance

The impact of marijuana legalization in Canada went far beyond the lives and health of cannabis 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.

The industry has made changes to marijuana and life insurance since then. These adjustments include how they process applicants and how they calculate premiums. Importantly, pot users can now purchase life insurance policies that fit their lifestyle and needs without having to pay higher premiums.

We’ll be covering these factors in this article – the most frequently asked questions, types of policies, and key points to consider when looking for life insurance as a cannabis user:

The Key Takeaways from Marijuana and Life Insurance

• Life insurance companies had to re-evaluate the impact of legalization on their premium rates after it was announced that marijuana is now legal.
• Some life insurance providers will still approve you instantly if you’re a recreational marijuana user.
• An underwriter will refer you to someone to help you understand your marijuana use.
• It is possible to get life insurance for Cannabis users.

Life insurance before Marijuana Legalization

Insurers had been reviewing their life insurance offerings to cannabis users before Bill C-45. The public’s attitudes towards marijuana were changing and so was the number of cannabis users. As marijuana became more mainstream, insurance companies began to pay more attention.

They began to update their underwriting protocols. One of the most significant changes was to remove marijuana from the high-risk category tobacco occupies. As early as 2016, some of the largest insurance companies began to do this, stating that marijuana users would not be charged smoker rates unless they also used tobacco.

Other factors that distinguish users are their purpose and frequency of use. For example, those who use it for recreational purposes less than once a week could be eligible for non-smoker rates. For medical reasons, the coverage rates would be comparable.

How do insurance companies view Marijuana users?

Here are some factors insurance companies take into consideration when creating quotes for marijuana users.

Lifestyle Factors

Companies will need to verify that customers have disclosed their marijuana use when applying for life insurance policies. Many policies require medical examinations to support this, including blood and/or urine test. However, policies can be arranged that do not require these tests. We’ll get to that later.

Other than your medical test results, important factors include your lifestyle, general health, family history, and whether you smoke. To determine whether you are a high-risk or low-risk policyholder, life insurance companies use determinants. If you smoke or have health problems, you’ll likely be considered higher-risk and pay higher premiums.

Marijuana Use Frequency, Methods & Purpose

The same applies to marijuana users who use it recreationally or medicinally.

Some insurance companies don’t distinguish between smoking a joint and eating a magic brownie. They will still provide the same coverage and rate for life insurance. Some companies are more accommodating with edibles and will offer a non-smoker rate, even if you smoke less than two cigarettes per week. Cannabidiol (or CBD oil) is less likely than other drugs to impact insurance premiums.

Recreational marijuana use is generally considered low-risk. Another risk factor is a history of anxiety or mental illness. When combined with marijuana, this can make you more vulnerable. You should also consider whether marijuana affects or impairs your driving ability.

A rule of thumb is that the premiums for life insurance will be higher if you are in poor health.

Life insurance for Casual Marijuana users VS. Regular Marijuana Users

Marijuana users must pay attention to what insurance companies consider ‘frequent use’.

Some companies limit you to two or fewer joints per week. Others have a maximum of four joints per week. Companies will consider you a frequent or regular user if you smoke more than this. You are exposed to the same risks as a smoker.

There are three types of life insurance policies that you can choose from. These are the standard life insurance policies that offer 1) non-smoker and 2) smoker rates.

An underwritten policy requires blood or urine samples. The non-smoker rate will be more expensive than the smoker, but they are generally cheaper for users of marijuana. You should be prepared to take the above exams and give a complete medical history. If you are approved for coverage, your premiums will be lower.

This third option does not require medical exams. These insurance policies can be classified as either a 1) simplified-issue life insurance that covers several health-related questions, but does not require a medical exam, or 2) guaranteed issue insurance that does not include any questions or requires no medical exams. The insurance company is at greater risk without underwriting. This can lead to a higher insurance premium and sometimes, even less coverage. Non-medical policies may also have a “no benefits period”, which can look like two years before you are eligible for any payouts should anything happen.

Are there any drug tests that I need to pass when applying for life insurance as a Marijuana user?

We’ve seen that there are many options for marijuana users who want to apply for life insurance.

Non-medical life insurance policies require an underwriting process. A complete underwriting process requires a medical exam, which includes a drug test.

Your application includes free blood and urine tests that can help you identify whether or not you are 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 can also be used by insurance companies to check that you are telling the truth about your use. You must be honest with your applications. Insurance fraud is when you lie on your application. There are consequences if you don’t tell the truth, such as:

• Your application can be denied
• Your dishonesty can be shared with other providers by your insurance provider
• Your policy can be canceled if fraud is discovered
• Your family could also lose their payout if the worst happens. They will likely ask for medical records to confirm any history of marijuana use, including blood and urine tests.

Which questions should life insurance companies ask about Marijuana?

Are you a smoker? Here are some examples of the questions that insurers might ask you when you apply for life insurance.

• Do you use marijuana? What type of marijuana do you use? How often and how much?
• Were you prescribed by a healthcare professional for Cannabis use? If yes then please state the reason.
• Have you ever consulted a medical professional, received any treatment, or been recommended for treatment or counseling for drug use?  
• Have your job duties been affected or restricted in any way due to drug use? Have you lost your job, or have you missed any time from work or school because of drug use?
• In your past, have you ever been hospitalized or treated for a drug overdose?
• Have you experienced or suffered from any medical condition or impairment related to your drug usage?
• Are you or have you ever been a member of Alcoholics Anonymous, Narcotics Anonymous, or a similar association?
• Have you been charged with impaired driving or had your driver’s license suspended, been arrested due to the influence of alcohol or drugs? Have you been required to attend court-ordered alcohol or drug awareness programs?