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Difference Between Term Insurance Premium for Smokers and Non-Smokers

Published On Jul 14, 2021

We all have heard of the saying ‘Smoking is injurious to health’, but do you know it can burn a hole in your pocket as well, especially when it comes to purchasing a term insurance policy. Although smokers can avail a term insurance policy, insurers have different terms and conditions for smokers compared to non-smokers. Here is a guide to help solve your queries about the term insurance policies for smokers.

Who Is Categorized As A Smoker?

Insurance companies term those individuals as smokers who consume tobacco or nicotine in cigars, cigarettes, bidi, pan masala, gutka, nicotine patch, chewing gum etc. Specific questions like frequency of an individual’s smoking habit, the last time he/she smoked and the product he/she smoked etc. Moreover, insurance companies can ask for medical reports and records while assessing the term insurance proposal form. 

The insurance providers often classify people into 4 categories - non-smoker, preferred smoker, typical smoker, table rate smoker. A preferred smoker can be fit and healthy besides his smoking habit, whereas a typical smoker might have minor health problems. On the other hand, a table rate smoker suffers from major health issues because of smoking. Thus, the premium rates are decided according to these categories.

Why Are Term Insurance Premium Rates Higher For Smokers?

Chronic illnesses such as heart disease, lung cancer, and bronchitis can all be caused by smoking. As a result, smokers have a higher risk of contracting such conditions and have a lower life expectancy ratio than non-smokers. When determining the premium for term insurance, the risk of death is a major consideration. That is why smokers pay a greater premium due to their shorter life expectancy.

What Happens When You Hide Your Smoking Habits?

Many smokers might lie to their insurance about their smoking habits to avoid paying higher premiums. However, their efforts can be rendered futile as it may be simple to conceal your habits on the term insurance proposal form, but it is far more challenging to avoid nicotine traces in your urine sample during a medical test. Moreover, lying about your smoking habit can lead to severe issues. You can be charged with fraud or the insurance company can even terminate the policy. Furthermore, if it is found out that the life assured dies because of his/her smoking habit, which was not disclosed during policy inception, the claim request can be rejected by the insurance company. 

What Happens If You Quit Smoking?

A request to recalculate the premium rates at the time of policy renewal can be made by the life assured and the insurance provider might decrease the amount based on the last time the life assured smoked. It must be noted that each insurance company has their own rules and regulations; however, if the life assured has not smoked for more than 2 years, he/she can be considered a non-smoker. 

Take Away

The best thing to do is always speak the truth from the policy inception and accept that if you smoke, your insurance will cost more. When it comes to how long you must be smoke-free, insurance companies often have various regulations. Because you are purchasing term insurance for your loved ones, you must inform your insurer if you suffer from an unforeseen sickness. They will devise the most suitable plan to offer maximum benefits. 

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.    

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