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.
With recreational use of the drug set to become legal on Oct. 17, marijuana is moving toward mainstream acceptance, and the slow-moving and stodgy world of life insurance is no exception.
One by one, the big insurance companies have updated their underwriting protocols to move marijuana use out of a high-risk category of activities that includes things like smoking tobacco, and into a pool where premiums aren’t significantly affected.
“They saw the writing on the wall in terms of legislation,” insurance broker Lorne Marr says of the industry’s more liberal stance, “but the changes came about a little bit before.”
In 2016, Sun Life was among the first to stop considering marijuana use the same as tobacco. Others have followed suit. Marr recently surveyed almost every life insurance provider in Canada, and the vast majority now have a similar policy.
“A lot of the guidelines are still a little bit ambiguous,” Marr says. “But it’ s a big change from five or 10 years ago because everybody was getting smoker rates, which is a huge difference in the premiums.”
It certainly is. While insurance premiums are based on complicated formulas for a range of factors that include lifestyle and family health history, smoking tobacco is one of the surest signs of risk that insurers charge a premium for.