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How Can Smoking Affect the Calculation of Premium for Life Insurance?

Updated On Aug 02, 2021

Although life insurance policies are available to smokers, smoking can significantly impact your health and life insurance premiums. Moreover, different insurers have different terms and conditions for life insurance policies for smokers and non-smokers. Nevertheless, you must have certain questions like, in a long time, how much more will the policy cost you and, if you quit, what would happen to your life insurance plan. The following article will help answer such questions.

Who is a Smoker Under Life Insurance?

Those who use tobacco or nicotine in bidis, cigars, cigarettes, gutka, pan masala, nicotine patches, chewing gum, and other forms are referred to as smokers by insurance companies. Specific questions, such as the frequency with which an individual smokes, the last occasion he/she smoked at, and the product which he/she smoked, etc. Furthermore, when evaluating the term insurance proposal form, insurance firms can request medical reports and records.

Different Types of Smokers Categorised Under Life Insurance

People are frequently divided into four categories by insurance companies: non-smoker, preferred smoker, typical smoker, and table rate smoker. Apart from his/her smoking habit, a preferred smoker can be physically fit, whereas a typical smoker may have minor health issues. A table rate smoker, however, has severe medical conditions because of smoking. Thus, the premium rates are set in accordance with these divisions. 

How Can Smoking Affect the Premium Calculation of Your Term Insurance Plan?

Smoking can cause chronic ailments like heart disease, lung cancer, throat cancer and bronchitis. As a result, smokers are more likely to develop such illnesses and have a shorter life expectancy than non-smokers. The rate of dying is a crucial issue when establishing the premium for term insurance. Hence, due to their decreased life expectancy, smokers pay a higher premium. 

What Happens When You Lie About Your Smoking Habits While Buying A Term Insurance Plan?
To avoid paying higher premiums, many smokers may lie to their insurers about their smoking habits. However, their efforts may be in vain as concealing your smoking habits on a term insurance proposal form might be easy, but avoiding nicotine traces in your urine sample during a medical exam is way more complicated. 

Moreover, it is worth remembering that lying about your smoking habit can lead to grave consequences such as fraud charges or something worse like policy termination. Similarly, if the life assured dies due to a smoking habit that was not declared at the time of the policy genesis, the claim request may be denied by the insurance provider.

What Happens When You Quit Smoking During the Tenure of Your Term Plan?

The life assured can request that the premium rates be recalculated at the time of policy renewal, and the insurance company may reduce the cost based on the last occasion the life assured smoked at. Moreover, it is important to remember that each insurance company has its own set of laws and regulations; nonetheless, if the life assured has not smoked in over two years, he or she might be termed a non-smoker.

Endnotes

The best thing you can do is tell the truth from the beginning of your plan and accept that your insurance will be more expensive if you smoke. Insurance companies often have different rules on how long you have to stay smoke-free. Moreover, since you are buying term insurance for your loved ones, you will need to let your insurer know if you get sick unexpectedly so that they can come up with the most ingenious plan possible.

Also read - Term Insurance Or FD, Which Is A Better Option?

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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