Smoking or consumption of tobacco can affect the cost of your life insurance and harm your health. If you are a smoker and evaluating opting for life insurance, here are things you should keep in mind before choosing the right life insurance for yourself.
Who is considered a smoker?
Anyone who smokes cigarettes, tobacco, hookah, pipes, e-cigarettes, vapes, snuffs, nicotine patches, etc. is considered a “smoker” according to the insurance underwriters.
How is smoking correlated with life insurance?
There is enough medical evidence to suggest that smoking has been one of the leading reasons of certain life-threatening diseases like certain types of cancer, tuberculosis, heart diseases etc., It is less surprising that as per the underwriting rules smoking habits influence the policy premium rates. It ranks among the top factors which influence the premium rates of life insurance.
How much does smoking influence the premiums of life insurance?
By providing insurance to a smoker, the insurer is assuming a greater risk as compared to extending similar insurance to a non-smoker. Hence, the premiums for a smoker can cost you 40% to 100% more than that of non-smokers, based on a thorough evaluation of your health history.
In effect, an average cost of the premium for a 30-year-old non-smoker with earning capacity of less than Rs. 15 lakh may end up paying a premium of approximately Rs.15,000 to Rs 20,000 for a coverage of 1 CR Term Insurance Plan while a smoker of the same profile would have a premium of approximately Rs 24,000 to Rs 30,000 across various plans.
Calculate your Life Insurance Premium here.
Does the life insurance policy distinguish between an occasional smoker and a regular smoker?
It does not distinguish between the type of smoker, the general understanding is that an occasional smoker can become a regular smoker or a chain smoker over time. It merely distinguishes a smoker and a non-smoker and does not deep dive into details. Often, some individuals live in denial regarding their addiction to smoking, they may often be regular smokers but may tag themselves as occasional smokers.
What if you try to hide the fact that you are a smoker in your application?
The cardinal rule whilst availing of life insurance is to ensure that you make honest declarations in your application. Every aspect of your application should be written with utmost honesty and integrity. Hiding any fact or lying in your application can lead to claim rejection. In case your death occurs due to a smoking-related complication such as a heart attack etc., there is an investigation initiated by the insurance company to establish the authenticity of your claim.
In case, the insurance company learns that you have been a smoker and in the application, you have declared otherwise, the death benefit will be denied to your family/beneficiaries. This could put them under severe financial stress.
However, if the sum assured requires a medical examination, then you will have to give a urine sample which will be tested for nicotine, irrespective of whether you have declared yourself as a smoker or non-smoker. The medical result would indicate if you have lied in your application, this could lead to rejection of the insurance policy.
What if you start smoking after you have taken your life insurance policy?
In this case, your life insurance premium would not change provided you were a non-smoker at the time of opting for the plan. However, insurers have multiple ways to find out if you have been a smoker and for how long you have been smoking through doctor’s prescriptions, lung test reports, medicines bought in the past, social media, etc.
So, if you are an “occasional” smoker as well, you need to declare the same at the time of your policy inception to avoid denial of the claim. You will be considered a non-smoker only if you have completely quit for a minimum of 12 to 24 months.
From this note it is apparent that it benefits to quit smoking, not only will your health improve drastically, but you will also end up paying lower premiums on your life insurance. Take a step towards better health today!