Research and Infrequent Marijuana Usage
As research by insurance company’s increases, the life insurance industry has been paying close attention to progressive studies being performed in Canada and the U.S. on the effects of medicinal marijuana. More specifically, the research has focused on the effects of infrequent marijuana usage compared to the effect of tobacco on cigarette smokers.
Thus, BMO is the first life insurance company to conclude that occasional marijuana smokers do not share the same risks as cigarette smokers.
How These Changes Affect Your Life Insurance Premiums
Life insurance companies base rates and premiums on the risk of insuring individuals, and this process is called underwriting. Underwriters evaluate the risk of insuring someone and then use this analysis to set premium rates.
In the past, insurance companies charged marijuana smokers cigarette smoker’s rates if they smoked marijuana within 12 months of applying for life insurance. As you’re probably aware, smoker’s rates are substantially higher than non-smoker’s rates due to the many health issues caused by tobacco use.
Accordingly, this higher cost for insurance stopped infrequent marijuana smokers from applying for life insurance, or purchasing a lower coverage amount to compensate for the cost.
This announcement is great news for occasional marijuana smokers because now they can get affordable life insurance rates if they fall within other criteria in the underwriting analysis. Thus, this means that standard life insurance pricing is now available to a much larger group of the population.
BMO insurance based it’s decision on statistics that show 18% of Canadians smoke marijuana occasionally for recreational purposes. Although the 2012 survey doesn’t specify occasional usage, this is still quite a large number of people.
BMO Life Insurance Criteria
Each case will be evaluated on it’s own by differentiating risks of those who abuse drugs (including marijuana) from those who only smoke for occasional purposes, and they will base their decisions on the following criteria:
- Applicable to new life insurance applications (not ones already in place) for coverage amounts up to $2,000,000
- Includes all life products but not critical illness coverage
- Applicants must have no associated or underlying risk factors or conditions such as mental-nervous history, alcohol abuse, occupational hazards, other drug use, lifestyle or medical concerns
- Occasional marijuana definition: Applicant smokes up to two marijuana cigarettes per week for recreational purposes only – excludes medicinal marijuana users.
If you smoke marijuana occasionally and want more information, we can help. At Shelter Bay Financial Corp., we are life insurance professionals that can answer any questions you have and help you apply for coverage.
Call us at 1.888.498.5288