Unless you have been boycotting all things news related for the last year, you know that cannabis becomes legal in Canada on October 17th, 2018. The legalization of cannabis/weed/ganja/pot/reefer will have far reaching effects, from the rules around impaired driving and even in the workplace. When it comes to stodgy, old life insurance, however, they are very progressive.
Since 2016, there have been at least 3 major insurance companies in Canada who decided to no longer considered an applicant a smoker or "high risk" if they were a recreational cannabis users. Recreational, in their eyes, is 3 times a week. A major difference, though, is if you have a prescription for medical marijuana. At that point, they take the details of the prescription as fact (10 grams a week, 1/4 oz CBD oil daily, etc) regardless of what your actual consumption is.
I have recently had 3 applications for life insurance where the client has a prescription for marijuana for various ailments (anxiety, PTSD, and chronic pain). Through one insurance carrier, we had a flat-out decline due to cannabis use (I'll remember that after October). The other two were with a different insurance carrier. They said they would consider the applicants as nonsmokers (read cheaper premiums) based on their blood test results and then underwrite the condition that lead to the prescription. Needless to say, that first application went to this company as well. [UPDATE: all three policies have been issued with nonsmoker rates]
So, let's say you do indulge in a little cheeba after October 17th, how are you supposed to get life insurance? Here's what you do:
- Find a company that will consider you a nonsmoker (psst....I know a few)
- Do NOT lie about your usage. If it comes out during any tests, kiss your policy goodbye. Even worse, if you lie, die within 2 years of a new policy and they found out you misrepresented yourself (LIED), they can deny payment. No money for your family.
- Send in a cover letter providing as much information as possible regarding the underlying condition and what actual consumption is.
- Sit back and watch Pineapple Express while they do what they do.
To be blunt, drugs are bad. But if you must burn some grass with your best buds, you still have a good shot at getting great life insurance coverage. In the last year I have learned more than I thought I ever would need to about Mary Jane (from weed stocks to how they name strains) but at least a few good things have come from it: 1) I can have an intelligent conversation about it with ANYONE and b) I have experience with cannabis and insurance companies and know what to expect. If you need more information or are interested in looking at you options, call my office. We wont judge.
Kenneth Coombs CFP CHS RRC
Ken has 13 years experience in the financial services industry, is a Registered Retirement Consultant and a Certified Financial Planner. Ken has written financial planning columns and has been a guest on financial radio and podcast programs.