Health and life insurance for cannabis users

BY: ANDREW STEWART

With recreational use of cannabis set to become legal on October 17^th, marijuana is moving toward mainstream acceptance, and the slow-moving and stodgy world of life insurance is no exception.

There are things we don’t know about how cannabis legalization is going to look in Canada. But let’s start with a more basic question.

What are we supposed to call it?

Cannabis. Pot. Weed. Marijuana. Or one of dozens of colourful words like ganja, dope, cheeba, 420, and the sticky icky. It was interesting to learn the word “marijuana” came into vogue under Harry Anslinger, the first commissioner of the Federal Bureau of Narcotics widely credited with single-handedly starting America’s War on Drugs. When attempting to persuade senators with large immigrant populations to support a federal ban on cannabis, Anslinger emphasized the Spanish, foreign-sounding word to cast the plant as scourge invading the U.S.

Some of Canada’s biggest insurance companies have updated their policies on marijuana use, and the changes are having a major impact on regular users’ premiums. The industry is changing for competitive reasons. If marijuana use is to become even more widespread, they may scare off a growing number of customers with prohibitively high premiums. These companies are in the business of acquiring young clients who are to be in this thing for the long haul.

The cost differences between being classed as a smoker vs a non-smoker are dramatic, and as you get older the numbers become even more dramatic. The rates for a 35-year-old smoker for $500,000 of T-30 life insurance is $150 per month, whereas a non-smoker would pay only $68. This is a savings of 45% for a non-smoker or potential cannabis user.

Should you review your current life insurance coverage?

• If you have purchased your life insurance before 2017, then it would be prudent to see if you are considered a smoker vs a non-smoker
• Term life insurance rates have declined over the past five years, so you may be able to save money, whether you are a smoker or not
• If you had put off looking at life insurance due to your worry about casual cannabis consumption you will be fine to apply now

For recreational users, the changes are huge savings in premiums, but for the medical cannabis user’s these changes could be just as substantial. Canada’s medical marijuana system is going to thrive after recreational legalization and a major key to the growth will be employee healthcare plans. The key differentiator (for medical marijuana) will be paid benefits. Some insurers are starting to cover pot in response to rising demand from employees of the firms buying their coverage. Grocery chain Loblaw last year became the first major Canadian company to ask its insurers to cover medical marijuana.

Eligibility for coverage of medical cannabis purchases will be subject to certain conditions determined by the insurer and prior authorization from the insurer will be required. Some insurer’s specified that medical cannabis “will be covered only when used to treat or relieve one of the following medical conditions when standard pharmacological treatments have not worked: chronic neuropathic pain; cancer-related pain; apasticity secondary to multiple sclerosis or spinal cord injury and nausea and vomiting caused by chemotherapy.” In addition, the medical cannabis must be prescribed by an authorized physician or nurse and purchased solely from a licensed vendor authorized by Health Canada.

As a country, this shows we are ready to move forward and remove the stigma of smoking cannabis. But some Canadian insurers are still reluctant to cover it, which suggests most patients here and elsewhere may continue to bear most of the cost.