Life insurance and Marijuana: Everything You Should Know

When it comes to marijuana and life insurance, many applicants wonder whether using cannabis will impact their insurability and premium rates. Well, it all depends on how frequently you use marijuana and whether it is medicinal or recreational.

If you are an occasional user — the definition of which can vary depending on insurer — and use it for personal enjoyment, you are likely to easily qualify for life insurance and even receive preferred rates. However, frequent users or those who consume marijuana for health benefits, may have to pay higher premiums.

Before and After Legalization

The Bill C-45 legalized access to recreational cannabis inCanada in October 2018. Prior to the C-45 bill, many life insurance companies classified all marijuana users as tobacco users and hence offered them the same rates as smokers. This, however, is no longer the case. Today, several top Canadian providers no longer charge marijuana users smoker rates, unless they also consume tobacco.

Some life insurance providers classify applicants based on the frequency and the purpose that they use marijuana. For instance, applicants house recreational marijuana fewer than three times a week can receive non-smoker rates. Those with a medicinal marijuana prescription typically receive rates matching the severity of the health condition they are treating.

Things that life insurance providers consider if you use marijuana

When you apply for life insurance, the insurance company will ask you questions about your marijuana use. You will likely undergo a medical test and the underwriter will look at the test results to check whether you have provided accurate information.

Life insurance companies will consider the following things regarding your cannabis use:

• How you use marijuana (whether you smoke or ingest it)

• How often you use marijuana

• Whether you use it for medicinal or recreational purposes

In addition to these details, insurance carriers will factor in your health and lifestyle while assigning you a health classification such as Preferred Plus, Preferred, Standard, and Sub-standard. The better your health rating, the lower your premium rate.

How you use marijuana

Marijuana can be chewed, smoked, or sipped. Underwriters may look at how you use marijuana while assigning you a health classification and determining your premium rate.

Some insurers rate all those who use marijuana as tobacco users, regardless of whether they inhale or ingest cannabis. Consequently, they offer them only smoking rates, which can be two to five times higher than non-smoking rates. Other insurance carriers classify individuals who consume marijuana edibles or use cannabis oils as low risk.

How often you use marijuana

Insurance carriers will want to know how frequently you consume marijuana in a week. Some providers rate individuals who use marijuana four times a week or fewer as a non-smoker, which may lead to lower rates. If you consume more frequently, you are likely to be classified as a smoker, which, in turn, will increase your cost of insurance.

Your purpose for using marijuana

Recreational use of marijuana involves consuming it for enjoyment rather than for health benefits. Many life insurance companies look at recreational use of cannabis more favorably than its medicinal use and can offer these users non-smoking rates.

If you consume medicinal marijuana, insurance providers will want to know the health condition for which you are using it. They will factor in this information while calculating your risk. For instance, if you use marijuana for relieving back pain, that is not likely to impact your insurability or premium rate. But if you are using it to treat epilepsy and seizures, it will be looked at differently.

Keep in mind that life insurance companies will pair your marijuana use with other factors, like your health, lifestyle, and medical history, to calculate your risk. So, even if you use cannabis for recreational purposes, you may still be classified as high-risk, especially if you use tobacco or have an underlying health condition, such as an anxiety disorder or a lung disease.

What you need to know to get life insurance as a cannabis user?

If you use marijuana, some important points to keep in mind when applying for life insurance are as follows:

You should be honest about your marijuana use

When you apply for life insurance, life insurance companies may ask you questions related to marijuana such as:

• Do you use marijuana? If yes, how do you consume it? And how often and in what quantity?

• Has a healthcare provider ever prescribed medical cannabis to you? If yes, for which health condition(s)?

• Have you received treatment for or consulted a doctor about drug use?

• Have you ever been treated or hospitalized for drug overdose?

• Have you ever been convicted of impaired driving?

• Have you ever been court-mandated to attend drug or alcohol awareness program such as Alcoholics Anonymous?  

It is important to be truthful about your marijuana use on a life insurance application. Most life insurance policies involve a medical test. An insurance carrier will look at your urine and blood tests to check whether you are being honest about your drug use or not. Tetrahydrocannibal (THC) is the chemical that shows up in urine and blood for many days after marijuana use. Marijuana is detectable in the blood for 3 to 14 days and in the urine for 30 days, depending on the usage.

Besides your medical test results, life insurance companies will also likely check your medical records to determine whether you consume marijuana or not. So, even if you do not consume marijuana for 30 days or more before the paramedical exam, life insurers can still find out the truth. If you are caught lying on your application, consequences can be severe, like:  

• Your life insurance application may be turned down

• The incident will be recorded in MIB — an insurance consumer reporting agency — and consequently other life insurance companies will learn about it. This, in turn, will make it more difficult for you to get approval from other providers.

• If you were approved and pass away within the first two years of the policy issue date, the insurance carrier can reject the claim if it later finds out that you lied on your application.

Marijuana users can receive lower rates

While marijuana and life insurance may not go well together in certain situations, the fact remains that marijuana users can qualify for preferred rates. Each insurer has different standards, but many are willing to offer lower rates to individuals who use marijuana for recreational purposes, provided they are in good health and do not consume it daily.

Individuals who use marijuana for health benefits may have to pay higher premiums

If you have a medicinal marijuana prescription, the insurance carrier will want to know the health condition you are treating. If it is a serious one, you are likely to receive higher premiums. Generally speaking, underwriters are more concerned with the underlying medical condition requiring marijuana use than the marijuana use itself.

How frequently you consume marijuana also impacts your premium rates. Heavy users are likely to receive much higher rates than someone who consumes marijuana occasionally.

How does marijuana use affect your life insurance rates?

When a life insurance provider decides whether to approve you for a policy and how much premium to charge, they pay attention to how often you use marijuana. Occasional use may not impact your premium rate much, if at all, whereas regular use of marijuana may push up your rate considerably and even lead to a denial of coverage.

In addition to the frequency of use of marijuana, some insurers may consider the form in which you consume it. Generally, edible cannabis products and cannabis oils are looked at much more favorably than smoking and vaping.

Lastly, insurance carriers may want to know whether you use marijuana for recreational or medicinal purposes. If it is the latter, the more severe the underlying health condition that you are treating, the higher your premium will be.

Conclusion

Marijuana and life insurance can at times be complicated, but the bottom-line is that using it does not automatically mean higher premiums or a denial of coverage. In most cases, you can get life insurance cover if you use marijuana. Depending on your usage, overall health, and medical history, you may even get approved for a life insurance policy at preferred rates. And if your marijuana usage makes you ineligible for a traditional policy, you can access life insurance by taking out a no-medical plan.

If you are concerned about how marijuana use will impact your insurability and premium rates, consider speaking to an insurance expert atDundas Life. We will assess your situation and help you find a provider that is willing to offer you the desired level of coverage at the lowest possible price.

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Frequently Asked Questions

1.   What if I am denied coverage due to marijuana use?

If a life insurance company turns down your application, there is not much you can do about it. However, not all companies treat marijuana use the same way. So, consider applying with life insurance providers that are less strict about it. An experienced broker can help you identify such life insurance companies. If you just cannot receive traditional coverage, no-medical life insurance is an option worth looking at. Since it does not require a medical exam and sometimes does not even involve health question, marijuana use, or any underlying health condition will not impact your insurability.

2.   How do life insurance companies test marijuana usage?

As a part of their underwriting process, life insurers will ask you to take a medical exam from an insurer-approved physician. The paramedical exam involves collecting urine and blood samples and testing them for various chemicals, including THC, the main psychoactive compound in marijuana. THC is detectable in urine for up to 30 days and in the blood for up to three days since last marijuana use. Apart from the results of your medical test, life insurance companies may also check your medical records to get a clear picture about your marijuana usage.  

3.   Does the use of cannabidiol (CBD) impact life insurance rates?

The use of CBD products, like oils and edibles, that do not containTHC is not likely to push up your premium rates. However, if you use CBD to treat a medical condition, the latter may affect your rates.

4.   How much do marijuana users pay for life insurance coverage?

Your cost of insurance depends on many factors such as how frequently you consume marijuana, in which form you use it, and for what purpose. Even if you use marijuana, you can still qualify for preferred rates if you occasionally consume it orally (for example, in the form of pot brownie or THC-infused lemonades and gums) for recreational purpose. If you smoke or vape marijuana, you are likely to receive higher premiums.