Are All Marijuana Users Considered Smokers?

Posted on June 25, 2015 in Life Insurance Canada News
medical marijuana non smoker life insurance


Ever since a landmark court ruling struck down the prohibition on medical marijuana, the drug has grown in popularity in Canada with over 40,000 currently licensed patients allowed to consume cannabis as a form of medical treatment.

Medical marijuana is often used by patients to help deal with chronic pain and other serious diseases. Despite the apparent medical benefits of medical marijuana, Health Canada and much of the country’s medical community have stressed that more research is needed before they can fully endorse the drug’s usage.

Because of this, medical marijuana is still not considered to be a mainstream treatment drug and does not have a drug identification number (DIN) like other prescription medications. However, with medical marijuana being so popular among patients, insurance companies are now changing the classification of a smoker.

Should all medical marijuana users be considered smokers or non-smokers for life insurance underwriting purposes?

This question is noteworthy from a life insurance standpoint since smokers are usually charged higher premiums on their life insurance policies and have to go through a tougher underwriting process.

With the decriminalization of marijuana in Canada, two major life insurance companies have decided to treat cannabis users as non-smokers. This decision reverses a long-standing policy and offers many marijuana users far cheaper premiums.

Like others in the industry, Sun Life and BMO Insurance companies have always classified marijuana users as a smokers, charging them with rates as high as three times that of non-smokers.

But this has changed recently. Research now shows that marijuana use does not have the same health implications as tobacco.
Sun Life’s policy changes apply to all marijuana users who do not use tobacco, while BMO’s changes are more limited and only benefit those who smoke two or less “marijuana cigarettes” per week.

“Their decision was likely motivated by what would have been an unthinkable factor for a legitimate corporation in the past: a burgeoning market of Canadians who admit to using marijuana,” said broker Lorne Marr of Toronto’s LSM Insurance in a recent National Post interview.
“They’re trying to get an edge on the other companies,” he suggested. “I don’t think they’re just trying to lower consumers’ premiums. Being treated as a smoker by insurers certainly carries a financial sting. One $500,000 policy with a 20-year term costs non-smokers $53 a month, smokers $148”, said Marr.

“Applications typically ask if customers use marijuana, and while it’s possible to give a false response, companies administer urine and blood tests to back up information clients give them,” he said. “It’s likely now that other insurers will follow Sun Life’s example.”
In a statement Sun Life said, “In our industry, we keep up to date with medical studies and companies update their underwriting guidelines accordingly. As a result, people who use marijuana are now assessed … at non-smoker rates, unless they also use tobacco.”
Premiums for marijuana users may be based on the amount of marijuana a user consumes. Each case is different, but an average marijuana user could still be charged a standard smoker’s rate. Excessive marijuana users could be charged a higher premium since they are deemed to be more risky to cover.

Some marijuana users that either use the drug too much or can’t properly justify their usage could be declined a life insurance policy altogether. Also, if marijuana use is combined with other mental, physical or lifestyle issues the life insurance application may be declined or rated.

Supreme Court Ruling

Recently, the Supreme Court of Canada ruled that medical marijuana users will be able to use marijuana in ways other than smoking. This includes consuming marijuana through cookies, oils, lip balms and other extracts and derivatives.

If a medical marijuana user is consuming 100% of their marijuana through a non-combusting method, then they are technically not smoking. Not only can marijuana be eaten but many users will vaporize the raw cannabis or oils, creating no combustion or smoke.
If vaporizing or consuming edibles does not cause any more damage to the human body then eating a Big Mac or drinking a can of pop for example, these insureds will not likely be classified as smokers.

It’s worth noting that many marijuana users have tried to lie about their usage during their life insurance underwriting process in order to avoid paying higher premium rates.

This is a really risky move, as an insurance carrier could rescind the policy or deny a claim if they find out that the policyholder is an undocumented drug user. Remember, proof of marijuana usage can be picked up easily via blood or urine samples which are usually collected whenever an individual applies for life insurance.

If you’re using medical marijuana in any way (smoking or non-smoking method), it’s best to disclose your usage during the life insurance underwriting process. Either way, it’s a lot better to have your marijuana use documented so you don’t risk losing your policy in the future.

Here is a rundown of Canadian life insurance carrier policies with regards to their definitions of marijuana smokers and the impact on rates:

**Please note that all assessments and underwriting inquiries are strictly tentative in nature and are subject to full underwriting review.**

Assumption Life

Assumption Life's guaranteed issue policy, Golden Protection, isn’t an underwritten product. Since there is no question on drug usage in the Declaration of insurability, they do not underwrite the quantity of marijuana taken, of any form. The only relevant question in terms of marijuana usage is for the smoker/non-smoker status:

In the past twelve (12) months, have you used any substance or product containing tobacco, nicotine, or marijuana mixed with nicotine or used ecigarettes?

If the client can answer NO to the smoker status question, then the non smoker rate applies. Otherwise, if the answer is YES, then the smoker rate applies.

BMO Insurance

Normally, BMO Insurance would consider 2 "cigarettes" ‎per week as a non-smoker. Or equivalent usage in other forms.
They do not have any types of usage ‎as prohibited and would underwrite the case based on the facts as declared in the application.

Canada Protection Plan (CPP)

Up to their Simplified Elite plans, clients that are smoking (or vaping) marijuana more than 4 times a week are considered smokers. For edible users, they do not ask about ingestion of marijuana. Clients eating marijuana are considered non-smokers for all their non-medical plans.

Canada Life

Marijuana use is considered at non-smoker rates. It depends on the quantity that may warrant a rating, for example 150% of non-smoker rates.

Desjardins

An individual vaping in general is considered as a smoker rates; therefore, vaping marijuana is subject to smoker rates.

Equitable Life

In their Guide to Individual Underwriting, Equitable Life suggests that marijuana users that smoke up to two times per week and "occasional marijuana users" will be considered for Standard Non-smoker rates. Applicants who use marijuana daily will be given individual consideration.

Humania

Any amount of smoked or otherwise inhaled marijuana on a regular basis will result in a smoker rate. Ingested marijuana is considered on a non-smoker basis.

Industrial Alliance

Marijuana usage is considered at non-smoker rates, regardless of frequency or how it is used. Whether there will be a rating will depend on applicant’s age, frequency of use, and whether or not any other recreational drugs used now (or in past).

Our final decision may be the same, less favourable or more favourable than the tentative assessment given in this inquiry. All underwriting inquires are subject to review of a fully completed application, routine age and amount requirements, proof of income (if applicable), as well as any other requirements deemed necessary by Industrial Alliance Underwriting Department. 

ivari (formerly Transamerica)

This would be standard non smoker with a negative urine.

Manulife

Marijuana smokers have been classified as HS3 for approx. 1yr now. The underwriter will be looking at other areas of the application such as driving, alcohol, drugs, etc...which all-in-all might warrant a rating. Also depends on volume of usage.

RBC Insurance

If up to 8 joints a month, we may consider tentative standard.

SSQ Insurance

Vaping is consider smoking- therefore smoker rates. Baking/ingesting – unable to providing an accurate opinion;
If consumption is equivalent to 2 or less joints per week, then non-smoker.

Sun Life

Once you vape irrespective of frequency, you are a smoker.

 

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