Ask an Insurance Actuary: Cannabis is Healthier Than Tobacco

If you want an unvarnished, boring, yet completely rational and defensible opinion, ask an insurance actuary.

Actuaries are the professional numbers-crunchers whose jobs it is to assess and value risk. Sounds dry — and it is, have you ever looked an at actuarial table? — but the stakes are dear. Insurance companies are very large and very profitable companies. They are this way because actuaries are good at calling the shots to ensure they stay this way, and actuaries are good at this because they take in accurate data and ignore propaganda, opinion, or outright falsehoods.

For these reasons, it should not surprise that, a few months before cannabis legalization means marijuana sold openly in stores, life-insurance companies in Canada have finally deduced that marijuana is not nearly as damaging to one’s health as tobacco. Except, maybe, that stumbling upon this long-known and obvious nugget of information has taken so long.

A healthy man in his late 30s seeking life insurance might expect to pay about $60 a month. But if this man is a cigarette smoker, he can expect to pay about double, and not without good cause. For a long time, marijuana smokers (or marijuana smokers who were honest with their insurers) could expect to pay the same as cigarette users.

This never made much sense. Tobacco’s health problems are legion and well known: lung cancer, COPD, heart disease, stroke. Smokers’ mortality rates are three times that as nonsmokers. About 20 percent of deaths annually in the United States can be attributed to cigarette smoking, according to the Centers for Disease Control and Prevention.

As for cannabis there is, well, none of the above. You need not be a regular reader of this publication to be aware that there are zero recorded deaths in human history directly attributable to cannabis use. This is not to say that the drug is harmless, but it is certainly to say that its potential risk is nowhere near that of regular tobacco use. (And we would be remiss if we did not use this as an opportunity to remind that the only longitudinal study to examine marijuana smoking’s long-term health impacts found that “habitual use of marijuana alone does not appear to lead to significant abnormalities in lung function…. except for possible increases in ling volumes.”)

Sun Life was the first insurer to realize that marijuana didn’t create undue risk for its clients and to allow marijuana users to access rates much lower than tobacco users.

As Insurance Business Magazine reported, a few months ahead of Oct. 17, when marijuana will be openly sold in retail stores across the country, Canadian life-insurers have “seen the writing on the wall” and removed marijuana from the same category of risk factors as tobacco.

Insurance broker Lorne Marr told CBC that nearly every life-insurer in Canada had modified its policies to remove marijuana use from their lists of “high-risk activities.”

This doesn’t mean that every marijuana user will be able to buy cheap insurance — if they buy life insurance at all. Some cannabis users may have a history of prescription drug use for mental-health issues like depression, which remains a “red flag,” Marr said. But it is a sign that the companies have accepted marijuana legalization as a relatively low-risk activity.

American companies have yet to adapt to this reality. Most life insurers in the U.S. still lump cannabis in with tobacco — and will require you to submit to a urine test to see if you were telling them the truth. But insurance companies will eventually adapt as they did in Canada, if for no other reason than the actuaries’ honest opinion that failing to do so will cost them money, for no appreciable benefit.

TELL US, do you think other industries will follow suit in acknowledging cannabis as a low-risk factor for health?