With the federal government heading towards the legalization of personal marijuana use some life insurance companies have announced that occasional marijuana smokers would now be considered as non-smokers on new applications for life insurance and in some cases critical illness insurance.
How significant is this change? Substantial!
As an example, for a male age 35, the standard smoker premium for $500,000 of 20 year renewable term is $1,070*. Now a recreational marijuana user can purchase that same coverage for 410 per year. *
Sun Life, BMO and Empire Life were the first three companies to make this change and many are extending the offer to Critical Illness coverage as well. Most insurance companies are expected to make similar announcements. For some companies, medicinal marijuana users are excluded from the new offering but may be considered on a case by case basis.
During the underwriting process the insurer will take into consideration the quantity and frequency of marijuana use. Generally, an individual who smokes up to two marijuana cigarettes per week and uses no other tobacco products (including e-cigarettes and nicotine in other form) will be treated as a non-smoker. Hashish usage may also receive similar treatment.
The insurance companies point to the fact that they have been monitoring the latest medical research into the effects of occasional marijuana use on health. BMO also points to statistics that show 18% of Canadian smoke marijuana occasionally for recreational purposes.
For those who have already been classed as a smoker due to marijuana use, the premium reduction will not be received automatically. It is necessary to request the change on the applicable application for change form. If there is no change in health and all the conditions are met the premiums will be reduced upon approval.
If you are affected by the new developments outlined here, contact us for more information. As always, please feel free to share this article with anyone you feel would find it helpful.