How Does Cannabis Oil (CBD Oil ) Affect Your Life Insurance Application?
Have you ever been at a BBQ with friends and heard the question asked, 'Can a person get life insurance if they use Cannabis Oil?' Its a really good question so here's our really good answer.
Read in this article
- Balancing the known with the unknown - the art of Insurance Underwriting and Cannabis oil use
- Focusing on health data over moral dogma
- Spotlight on Cannabis oil use
- The problem with purity
- Known positive effects
- What we do know now
- The dark side of the same coin
- The question everyone wants answered: Can I apply for Life Insurance and Income Protection Insurance if I use Cannabis oil?
- Understand the basics - What your Advisor needs to know first
- Understand the process - What Insurers look for when you use Cannabis Oil
- Where to from here?
Balancing the known with the unknown - the art of Insurance Underwriting and Cannabis oil use
In Australia, cultivating and using cannabis for medicinal purposes, (including cannabis oil), were legalized at the federal level in February 2016. This legislative change allowed patients to access medicinal cannabis products, such as cannabis oil, under medical supervision. Many of these regulatory conditions have gradually expanded over time.
These same people are now wanting to get their Life insurance and Income Protection cover in place, and now have to navigate the new rules of insurance underwriting for medical cannabis use.
So where do they start?
Focusing on health data over moral dogma
When it comes to a purely clinical view of looking at the statistical risks of actions and their impact upon health and mortality, the life insurance industry (with its use of big data to predict future outcomes), is probably the most neutral player.
They look at the statistical reality of risks occurring, and how that affects the lifespan of a potential customer, and the commercial rewards if they decide to insure those risks.
There's no moralising, no judgement or cultural commentary - it's just life by the numbers (as we know them today). If a life insurance company declines to insure a particular risk, that’s because it’s an unusually high and unstable risk, (or they don’t have enough data about it) – not because it’s a moral or otherwise activity.
- For example: When it comes to recreational drug use – by using big data - we can show cocaine use combined with any form of vaping, so increases serious and significant risks of death, to the point you're deemed uninsurable.
It’s not moral – just statistical - the reality of understanding numbers of life.
Spotlight on Cannabis oil use
So how does Cannabis oil use for medical purposes, look under this same harsh big-data-spotlight, of the Life Insurance Underwriter?
You may be surprised.
The problem with purity
Historical recreational drug use has always been a difficult issue to accurately assess for life insurance, as there's no baseline of the quality of the ‘cutting agent’ materials that go into making recreational drugs.
Further reading: For those who like details, the January 2022 report, Illicit drugs street samples and their cutting agents, makes interesting reading.
Add to this, the wildly varying percentages of active drug ingredients, versus cutting agent (whether that's caffeine, glucose powder or powdered glass ceramics etched from the coating of the bathtub where the latest batch of recreational drugs were made), all these unknown issues explain the near impossibility of understanding, measuring and managing, the risks of many inorganic recreational drugs.
Unlike many substances (e.g., opiates or antidepressants), Cannabis, (marijuana or MJ) is not known to be fatal at any dose and has shown some beneficial effects for certain medical conditions, especially for managing chronic pain and anxiety.
But with the recent legalisation surrounding Cannabis oil use, the enforced new pharmaceutical standards of purity and precise measurement of active ingredients - more data has produced more understanding and options for the life insurance underwriter.
Known positive effects
While further studies are needed, it's becoming obvious in the big data there are advantages for:
- Medicinal cannabis and epilepsy in paediatric and adult patients
- Medicinal cannabis and multiple sclerosis (MS)
- Medicinal cannabis treating chronic non-cancer pain
- Preventing and managing chemotherapy-induced nausea and vomiting in cancer (CINV)
- Medicinal cannabis use in palliative care
What we do know now
Cannabis contains two primary active compounds:
- Tetrahydrocannabinol (THC): Responsible for the psychoactive effects that make cannabis popular for recreational use – it also has medicinal benefits, including reducing nausea, pain, and muscle spasms, and improving sleep and appetite.
- Cannabidiol (CBD): Non-psychoactive and potentially effective for managing seizures, pain, anxiety, and psychosis.
Medicinal cannabis is currently generally considered a second-line (or adjunct) therapy and while cannabis strains vary in their THC-to-CBD ratios, it's still unclear whether these compounds work individually or synergistically.
The dark side of the same coin
While cannabis (MJ) has some favourable health associations, there are significant risks, particularly with excessive use.
Cannabis use disorder (CUD) is a notable concern, affecting up to 30% of users. CUD is more common among heavy users, particularly young people, and can result in compulsive use despite negative consequences. Although withdrawal from THC is not life-threatening, symptoms can still be unpredictably disruptive.
Research highlights several health risks linked to Cannabis use:
- Schizophrenia: CUD significantly increases the risk, especially in young men.
- Accidents and Suicidal Behaviour: Research report links Cannabis use to higher rates of motor vehicle crashes, other accidents, and suicidal ideation or attempts, particularly among heavy users.
- Chronic and Mental Health Issues: Cannabis use is associated with chronic bronchitis, cognitive impairments (e.g., learning, memory, attention), and potential worsening of anxiety, bipolar disorder, and cardiovascular conditions like heart attacks or strokes.
This evidence suggests a nuanced understanding of Cannabis risk and benefits is critical for informed decision-making.
The question everyone wants answered: Can I apply for Life Insurance and Income Protection Insurance if I use Cannabis oil?
- Yes - as long as you work with the right specialist financial adviser who can understand the content and purpose behind your CBD use and ack as your advocate for your personal situation.
- This ensures your situation is assessed accurately within an appropriate medical context, rather than being mistaken solely for recreational use.
Open and honest communication helps us understand your situation and then connect you with the most supportive and understanding life insurance underwriter.
Understand the basics - What your Advisor needs to know first
When applying for life insurance or income protection with a history of CBD oil use, it's important to work with your advisor so we can understand;
- the context around your CBD use,
- how it affects any related medical conditions you may have, and
- the dosage and frequency of its use, and
- its source
Understand the process - What Insurers look for when you use Cannabis Oil
When underwriting life insurance and income protection applications from folks who use cannabis oil, particularly CBD oil, insurance underwriters look at several key factors:
- The purpose of use: Understanding whether CBD oil is used for underlying medical reasons, such as managing anxiety or chronic pain, versus recreational purposes is crucial. For example, CBD prescribed for anxiety could indicate a broader mental health challenge or be tied to situational stress, such as grief after losing a loved one. It's important we better understand the reasons
- Your frequency and Dosage: Regular and high-dose usage may prompt more in-depth assessment compared to occasional or low-dose use.
- The THC Content: CBD products with minimal or no THC (the psychoactive component of cannabis) are typically less concerning to insurers. Products containing higher THC levels may lead to stricter underwriting due to potential health and behavioural risks
- Product Quality and Source: The legitimacy and quality of the CBD products used are considered – prescription based solutions are viewed more favourably
- Disclosure and Honesty: A life Insurance application is a good faith application where all parties involved need to be transparent and open. Needless to say, full disclosure of CBD use is essential as non-disclosure or misrepresentation can lead to policy denial or future claims issues
Where to from here?
It's important to note that life insurance underwriting practices do vary significantly between different insurance companies. Choosing the wrong one for your situation, can create permanent problems.
This is why you need to work with a specialist adviser understands the current underwriting trends (yes shameless plug for Sapience Financial & Unusual Risks Insured) to make sure you're represented, in the best possible light.
Your Sapience Financial adviser needs to understand the full context of your CBD use, the plans for its continued or discontinued use and what's being done to help you manage the underlying situation that has triggered its use.
Call us today on 1300 137 403 or email us here for a no-obligation private chat about your situation.
Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses. He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn. Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.