Are you Googling Life Insurance Marijuana this week? Well, you’re NOT alone my friends. I think we’re breaking the internet today.
It’s FINALLY official, the manufacture, distribution, possession, and use of marijuana is now legal across Canada!
Yes, you heard me right. I didn’t think it would happen in my lifetime but it did.
Did you know Marijuana is one of the most widespread recreational drugs available on the planet today and 3rd only to alcohol and tobacco in popularity?
Canada is now the 2nd country in the world to legalize the recreational use of the drug nationwide.
So how are these changes going to impact life insurance? Find out!
Life Insurance and Marijuana - Why You Need Policy Architects
Marijuana use is a topic that a lot of people want clarification on. There are some very legitimate reasons to use pot as it has many medicinal qualities. Life insurance for medical marijuana, however, is approached with caution.
…insurers are treading carefully. Sun Life covers pain associated with cancer, multiple sclerosis, rheumatoid arthritis, HIV and palliative care for serious illnesses; chemotherapy-induced nausea; spasticity from MS; and anorexia due to HIV. Why Canadian Insurers are Wary of Covering Medical Marijuana
As you can see life insurance companies aren’t jumping on any bandwagons. That’s because there isn’t a lot of research in this area to back up the safety of Marijuana. Marijuana, up until this week has been a banned substance. Which made purchasing it for these reasons difficult. The good news is legalization is about to change all this.
If you want the latest news, Policy Architects agents have their fingers on the pulse of legalization! We are following underwriting closely to see how this monumental event will impact YOUR premiums!
Life Insurance Marijuana! It's All Gonna Change Baby!
Did you know Canada is now poised to be one of the world’s premier manufacturers of cannabis products?!
Which means our scientists are leading the charge into research and development. Clinical studies are beginning on a massive scale to mine out the medicinal benefits of marijuana.
These are exciting times for proponents of Marijuana. I myself am very much looking forward to their findings.
Just think of the possibilities! All of this research may reveal aspects of this incredible plant that we haven’t even thought of!
“…No need to smoke and hide when you know you’re taking a legal ride”
Legalize Marijuana, Peter Tosh
Although there are many Canadians who are excited by the prospect of walking into a cannabis store or shopping for marijuana products online, there are others who are worried. They voice concerns about the implementation of the new policy and whether the government’s distribution plan is ill-conceived.
No matter how you slice it and dice it, legalized recreational marijuana is here to stay and we’re going to have to learn how to deal with it.
As for the heated debate about the best way to distribute and regulate cannabis…
…I’ll leave that for the professionals to sort out. What I want to examine right now is the relationship between Marijuana and life insurance.
A Brief History of Marijuana and Life Insurance
Before we consider Life Insurance and Marijuana, let’s take a quick peek at the history of this popular plant.
In North America, colonists began growing marijuana (hemp) in the 1500’s to make cloth and rope. Production continued all the way into the 1930’s until the Marijuana Tax Act was passed by the U.S. federal government.
Yep, it’s always about the money people.
This act was implemented due to fears that Mexican and West Indian immigrants were introducing Marijuana as a means of intoxication through port cities such as New Orleans. Or at least that’s the official story.
The Marijuana Tax Act of 1937 imposed heavy tariffs which made the sale, possession, and transportation of hemp so costly, it effectively banned it.
Marijuana, associated with jazz musicians and edgy culture, was vilified by a lot of the talking heads. There was a lot of concern that widespread use would influence young people and lead them astray.
In the 1960’s, marijuana’s popularity skyrocketed among middle-class college students. In an effort to counter this, President Nixon’s Controlled Substances Act of 1970 was passed which classified marijuana as a Schedule 1 drug. Effectively putting it in the same class as heroin and cocaine.
Life Insurance and Marijuana
Of course, this led to the war on drugs in the 60’s and 70’s. Sigh – and we all know how that ended.
As you can imagine – at this juncture – if you applied for life insurance using weed was a serious problem.
Put it this way, if a policy was issued and the insurance company later learned that you were a marijuana user, it’s likely they would cancel it.
Thankfully as time wore on life insurance companies loosened the reigns. In the 80’s & 90’s, insurers figured out they had to change with the times. As recreational drug use became more and more acceptable in society their approach shifted.
These sentiments were facilitated by early studies that indicated the paranoia around Reefer Madness was unfounded. Recreational marijuana use wasn’t the one-way street to hard drug use people feared.
Life Insurance and Marijuana: Underwriting
So here we are today! It’s 2018 and we have to completely reevaluate the life insurance landscape.
In the rush for legalization, life insurance, and marijuana still remain a murky area. There’s no consensus in the industry regarding the impact of marijuana on your health and longevity.
Which makes underwriting marijuana users tough.
Quite simply, there’s only a very limited amount of medical data for life insurance companies to reference. That’s why they’ve been so cautious about underwriting both recreational and medicinal marijuana use.
Underwriting for Marijuana Smokers Prior to 2016
Let’s remember, life Insurance companies are in the business of making money and mitigating risk. If an increasing percentage of their customers begin using marijuana as a recreational drug, they need to know what that means for their bottom line.
The next question is how should they underwrite something they can’t properly assess?
Well, that’s easy!
Just lump marijuana users with smokers…
…or at least this is the way they handled underwriting up until 2016.
If you disclosed any marijuana use you were automatically categorized as a smoker and as such, paid much higher premiums.
That doesn’t seem fair! I NEVER indulge in Tobacco. I only smoke weed once in a blue moon!
Well prior to 2016 it didn’t matter! You were still lumped in with smokers. Insurance carriers assumed if you were smoking weed you were likely to be smoking cigarettes as well. Besides, there was very little research to suggest smoking pot was any safer.
Funnily enough, if you smoked no more than one cigar per month at this time, you’d be eligible for standard non-smoker rates! This is still standard policy among most life insurance companies in Canada. Hmmm.
When the Canadian government decriminalized cannabis for medicinal use, life insurance companies began to treat marijuana users differently.
They no longer considered marijuana use to be a high-risk activity. Since 2016, almost all major carriers offer standard non-smoker rates to casual marijuana smokers…
…provided they don’t use any tobacco-related products with their pot.
How Will Marijuana Legalization Affect My Life Insurance in 2018?
Well, the good news is you’re no longer looking at smokers rates.
The bad news is at the time I’m writing this article, the best health classification you can expect to get as a marijuana user in Canada is a standard, non-smoking rate.
I do believe that as our industry comes to grips with legalization, we’ll see Canadian Carriers offer preferred plus rates to marijuana users like they do in the US.
For example, if you smoke marijuana once per month or less you may be eligible for preferred plus rates with Lincoln National Life insurance…
...and preferred rates if you smoke no more than two times per week.
Hey, Minnesota Life may offer you preferred rates if you smoke marijuana 24 times per year or less.
I personally think it’s VERY likely Canadian Carriers will follow suit, it’s just a matter of time.
Canada Protection Plan announced it will give marijuana users non-smoking rates if they smoke marijuana no more than four times per week. Not to mention the fact, Assumption Life's Simplified-Issue allows "frequent" marijuana smokers to obtain non-smoker rates with no definition of what "frequent" means.
Their eligibility question reads: “In the past 12 months, have you used any substance or product containing tobacco, nicotine, or marijuana mixed with nicotine or e-cigarettes?” If you can answer ‘no’ to this question you're eligible for non-smoker rates. Which means there's no doubt that change is in the wind.
In a nutshell, Canadian life insurance companies want to make some dough so there's competition for this market.
Hey What About Edibles?
I bet you’re wondering how marijuana edibles will be treated when they come online in 2019! Will underwriters view them the same as smoking and vaping?
That’s a great question! As you can see, the life insurance and marijuana landscapes are changing very quickly. That’s why it’s imperative to consult an independent life insurance agent like those at Policy Architects.
We’re up to date on all the latest developments with respect to underwriting and cannabis. We can help you find the most lenient carrier for marijuana use and get you the most affordable rates.
Whatever You Do, Don't Lie About Smoking Pot!
The temptation is there to just fudge the truth – right!?
NOOOOOO. Please don’t ever lie to your agent or life insurance company to lower your premiums.
It’s the worst idea. It’s imperative that you always respond to questions with complete transparency.
If your life insurance company catches wind that you were not honest they can and will refuse to pay out your claim.
Yes indeed, this is called fraud and you need to steer clear of that at all costs.
Life Insurance and Marijuana: There's No Such Thing as Stretching the Truth
Hey come on man, now that recreational marijuana use is legal across Canada, there’s really no reason not to disclose my usage…
Wrong I would never recommend approaching life insurance this way.
For argument’s sake, let’s assume you’re an occasional pot smoker. How likely is it that you’ll pass the life insurance drug test?
Typically, when you apply for traditional life insurance you undergo a health exam, which requires blood and urine analysis as well as:
- Blood pressure check
- A battery of questions about your medical history, etc.
The blood test can detect Tetrahydrocannabinol (THC), one of the active ingredients in marijuana anywhere from 3 to 14 days after use. A urinalysis test for life insurance can reveal marijuana use as far back as one month or more depending on your frequency of use.
So let’s say you think you’re in the clear. Why should you tell them you smoke the occasional joint?
It's Just NOT Worth It
Even if you stand a good chance of getting under the wire, is it worth the risk? What happens when you’re caught misrepresenting the facts on your life insurance application?
You’re jeopardizing your coverage and your family’s security. Seriously premiums are expensive and what if it’s all for naught?
Did you know that even if your death is unrelated to marijuana use, the insurance company will deny a claim if you lie on your application? This means ultimately your beneficiaries won’t see a dime if they can prove you lied.
Secondly, have you ever tried to apply for a credit card with a bad credit rating? Well, it’s the same for life insurance. When the company finds out you’ve made a false statement on your application, they report you to the Medical Information Bureau (MIB). If you try and apply to another insurer, they’ll find out about your lies through the MIB and reject your application.
When it comes to life insurance honesty is always the best policy.
Medical Marijuana And Health Insurance
With things changing on a daily basis, no post on life insurance and marijuana would be complete without mentioning legalization’s impact on medical marijuana and health insurance. Here are some highlights:
- Sun Life offers medical marijuana coverage through its private health insurance plan
- SSQ Insurance just announced last month it’s offering group plan members coverage of medical marijuana expenses as early as January of 2019.
- Manulife covers medical cannabis use
- Desjardin covers medical cannabis use
Under the terms of a new agreement, GroupHEALTH and Zenabis will offer Canadian employers the opportunity to provide comprehensive medical cannabis coverage in their employee benefit plans.
Life Insurance and Marijuana: Why You NEED Policy Architects
Whew! Life insurance and marijuana is quite a hot-button issue and we are following this exciting area of life insurance as it unfolds. I think it’s so important for people to know what is happening in a timely fashion.
With so much innovation in the medical field, it’s important for clients to know that life insurance underwriting is not cast in stone.
In fact, it’s constantly changing. Hey, insurers want to expand their market as far as they can while still making money. This means when clinical studies roll in about CBD oil, edibles, vaping and smoking underwriters will switch up their approach.
My guess is that we will see a lot more permissiveness which means cheaper premiums for YOU.
Keep in touch with unfolding events by reading our blog. If you have any questions give us a call today. We look forward to speaking with you about your circumstances.