Since the legalization of cannabis in Canada, one question we often hear from smokers and non-smokers is how life insurance companies view the use of cannabis when considering covering someone for life insurance.

There are several factors insurance companies have had to consider, such as the following:

• Are all Cannabis users the same?
• How much risk does Cannabis represent from the insurer’s perspective when compared to traditional smoking?
• Should joints (smoking), vaping (inhaling vapour rather than smoke), and edibles (ingesting cannabis) be treated differently?
• What does the long-term data show about the risks, if any, between Cannabis use and health?
• Is Cannabis habit-forming and if so, should it be considered an addiction risk?
• Does the amount per use and frequency per week matter?
• What are the differentiators between medical and recreational use?

What is proving to be tricky is trying to work out if someone who uses Cannabis is classed as a “smoker”. As you may know when you are quoting life insurance for someone who is a smoker, this can increase the premium considerably, so it is important for us to make sure we understand what each companies view is, so we can provide the right advice and illustrations. One insurer that I have been dealing with confirmed that if Cannabis was used without mixing any tobacco/nicotine products then they would be considered a non-smoker, including if it was vaped. The key part for this company was the combination of Cannabis and tobacco. However, this may not be the view of the next insurance company. Not all insurers are treating the use of Cannabis the same.

Insurers also consider the frequency of use and how it is being used to make a decision as to whether you would be classed as a smoker or non-smoker. I have experienced some companies applying a rating to the standard premium for certain circumstances where the use of Cannabis is on a regular basis.

It is certainly making the underwriting process more interesting and complex since 2018. I have also noticed that since it became legal, people are more open about their use of Cannabis and feel client responses to the lifestyle questions are definitely more honest. (Remember, your insurance benefit can be declined if you were dishonest on your application!)

In summary, when you are considering life insurance, it is really important to speak with an advisor who has contracts with many different insurance companies so that they can pick the right company that would provide the best value policy based on your personal lifestyle circumstances, cannabis or no cannabis.

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