DO YOU NEED TO SAY GOOD-BYE TO LIFE INSURANCE IF YOU LIKE POT?

As you probably know, Prime Minister Justin Trudeau’s electoral campaign promise to « legalize pot » has come to pass. This will have implications on many things.

What is the position of life insurance companies regarding this?

The fact is that the use of cannabis is not grounds for refusal of an application for life insurance.  However, your insurer wants to know if you are into this habit. There is a clear difference if you are a heavy user of an occasional smoker. Low consumption of cannabis is not considered a risk of early death by insurance companies. In the case of an individual who is addicted to it, life expectancy is diminished.

Pot, just like alcohol or tobacco, should be consumed in moderation to avoid its negative effects on your health. If your medical exam proves that you are in perfect health, it would be most surprising for an insurance company to refuse to give you coverage.

This is why you must be absolutely honest with your broker if he asks about it or the topic is covered in the application form. Lying about the issue can have serious repercussions.

In fact, an insurance company can cancel the policy, or even retroactively, without due process if it is discovered that you had lied about it. The insurer is also within its rights to refuse paying the death benefits to the estate. Lying on your application to lower your premiums is really not a smart thing to do.

What can you do to reduce the cost of premiums? Ask a professional and be honest with him. By knowing your habits, he can more effectively find the best insurance available.  

Don’t let your savings go up in smoke!

Life insurance companies in Quebec and their stand regarding marijuana use

The majority of life and health insurance companies are quite tolerant about marijuana use, even in the case of recreational marijuana use, which was illegal until recently. In fact, life insurance experts strongly recommend to clients who smoke pot for medicinal or recreational purposes to inform their insurer.

In fact, cannabis users are seen in the same light as tobacco smokers so they have a slightly higher premium to pay. With the passage of the bill seeking to legalize cannabis in the Senate, we should also see the law become effective within two to three months’ time. If you have become emboldened to try cannabis now due to its legal status and you are a life insurance policyholder, don’t be afraid because your coverage will remain valid.

In fact, an insurance company cannot refuse to pay an indemnity because of cannabis consumption, whether it is a one-time incident, occasional, or regular, if it happens after your subscription. It is the same for group life insurance.

It is at the level of new applications that the issue becomes complicated for insurers. With the legalization of cannabis, they need to quickly review their criteria because the number of users may significantly increase.

Some insurers may follow the lead of their American counterparts who are from states where marijuana use is legal and require a doctor’s prescription before issuing a life insurance policy or refusing to give coverage to cannabis users over the age of 25. It all depends on each individual insurer but changes may be forthcoming.

What does your employer think if you smoke pot daily?

It is possible for an employer to require tests to detect drug use in very specific cases.

With the coming legalization of cannabis, this changes the cards. Can an employer still require drug tests or send home an employee who has taken drugs?

Will an injured worker who is under the influence of cannabis be entitled to compensation under the group insurance plan?

Secondary effects of cannabis which insurers consider…

Because of the way in which certain molecules such as THC (tetrahydrocannabinol) assimilate in the body, current screening tests lack the precision to accurately determine the consumption habits of individuals who will obtain insurance in the future. THC is stored in the body and slowly released into the bloodstream. In addition, this varies from one person to the next.

Scientific studies have not yet proven that consumption of cannabis can increase the risk of developing cancer.

However, this substance is linked to many mental disorders, notably among consumers aged 25 and below. Many will develop psychotic disorders, chronic anxiety, addiction, and sometimes even disorders similar to those with post-traumatic stress. It is, therefore, natural for insurers to worry about the possible significant increase in consumption in the future.

What happens if the insurer does not know that you smoke pot?

For as long as your broker does not ask you, you are not obligated to report any consumption.

Your insurance company cannot, for any reason, refuse to pay indemnity on these grounds if you were not asked to provide the information. However, make sure that the question is not in the application form before you sign. Your broker may have omitted to ask you but your signature is binding.

It is still advisable to mention the fact to your broker and let him be the judge in the matter. He is in the best position to know if it is necessary to inform the insurance company.

If your contract amount is considerable (about $150,000 or more), you may be required to report to a doctor regarding your state of health. For indemnity of $1 Million or more, you will be asked specific questions regarding your health, your habits, and your background. You can also expect to have urine and blood tests.

Having a medical prescription for the use of cannabis will not lower your premiums, quite the opposite. This type of prescription is usually due to a serious illness; therefore, the risk is bigger for the insurance company.

On the other hand, it is not unusual for a broker to successfully negotiate lower premiums for clients who have completely ceased smoking tobacco for over a year. It is, therefore, likely that the same condition will apply to those who stop smoking cannabis.

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Insurers will certainly react to the adoption of Bill C-45. Get a headstart by subscribing to life insurance or disability insurance before prices skyrocket !