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Legal marijuana and life insurance: What’s changed?

by Sam Stilson
3 min read

On October 17, 2018, the Canadian government legalized the use of recreational marijuana. While this changed things in a big way for people who smoked weed, it’s also had an effect on non-consumers and adjacent industries. So far, legalization has contributed to the volatility of the stock market, adjusted liquor store hours, and made some surprising changes to the insurance industry.

Doctor Greenthumb

Medicinal marijuana use has been legal in Canada since 2001 but Canadian insurance companies have only recently started covering its use in their health benefits plans. This is likely in response to the huge increase in medical marijuana prescriptions in recent years. The number of registered clients for medical marijuana has just about doubled from April 2017 to June 2018. Sun Life added it to their group benefits plans in early 2018, approving its use for pain associated with cancer, multiple sclerosis, rheumatoid arthritis, HIV and a variety of other conditions.

In turn, Manulife announced a partnership with Shoppers Drug Mart in July, in order to educate consumers about medical marijuana. They also cover the use of the drug sparingly in some benefit plans. Great West Life has announced their intentions to include it in their group benefits plans and the Co-Operators followed suit at the end of October.

With the biggest insurers in the country announcing plans to or offering benefits coverage for marijuana just before or after legalization, it’s clear that the industry has already responded by shifting their perception of the drug, even if it’s happened begrudgingly.

The good bud

But what about recreational use? That’s what’s really changed. How are insurers approaching cannabis use when it’s not medically prescribed?

While there have been some changes in the industry, it’s not widespread. The CLHIA, for instance, is quick to point out that recreational use is still not covered by any benefit plans.

However, one big change has been the classification of marijuana users as non-smokers. Traditionally, those who actually admitted to its once illegal use were classified as smokers. Now, cannabis consumers are considered non-smokers by most insurers with some limits (they vary by company) to the amount of bud they can enjoy. This is a huge change; it will lead to substantially lower premiums for any who had been previously classified as a smoker. Monthly rates can sometimes double for smokers vs. non-smokers.

Other insurance categories

Many observers expect there to be changes coming to the auto and home insurance industries now that marijuana is legal. While nothing has been announced in the early days of legalization, concerns about driving while high and growing marijuana at home have insurers nervous. As more data emerges, changes will undoubtedly come based on cannabis consumption.

High times

It remains to be seen how else life insurance rates might be affected, but the industry is closely observing the statistics on marijuana use. As more and more medical patients use the drug, it will become a more prominent option in drug plans and as more recreational users come out of the shadows, life insurance plans will openly and accurately assess its health benefits and risks.

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