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Why Tobacco Consumption Is Proving Heavy on Our Life Insurance?

Updated On Apr 26, 2021

The insurance premium is calculated based on personal details collected at the time of purchase of the product.  Factors such as age, ethnicity, marital status, behaviour, family background, are some of the details taken. At the time of obtaining a life insurance contract, it is mandatory to fill in all the necessary details.

To enjoy less premium, one may conceal habits such as drinking, smoking, or chewing tobacco. However, this may lead to the cancellation of the policy and the policyholder would not be entitled to any benefits that are available under the policy during the claim. When it comes to the price of insurance premiums, our habits make a significant difference, and most importantly, concealing them at the time of obtaining insurance plans could lead to bigger problems.

Also Read:- All About Life Insurance

Impact of Tobacco Consumption on Life Insurance

The following are the effects of tobacco consumption on Life Insurance

1. Premium Rates

Since smokers are more likely to come into contact with many diseases, it makes them more vulnerable to health problems. For smokers, most insurers would also charge a higher premium rate relative to non-smokers. In fact, the higher premium charged is a way for insurers to offset their overall costs incurred during the claim settlement, which by the way, increases in probability.

2. Non-Disclosure/Lying about Smoking Habits

If the information that the policyholder smokes is withheld from the insurance provider, they will refuse to pay the policy sum when a claim arises for reasons of dishonesty, thus resulting in a huge financial burden on the policyholder.. The policyholder must declare facts about their health, past ailments, and behaviour that may be harmful to their health if the benefits of health insurance are to be availed. 

3. Denial of Other Health Insurance Plans

Your health problem is likely to get worse when you age if you are a long-time smoker. It would be impossible for smokers with bad health problems to get through a comprehensive medical insurance plan. Comprehensive health insurance plans cover critical ailments and surgical operations, including cardiac and cancer-related diseases, in a comprehensive manner.

Bottom Line

Insurance is founded on the utmost good faith and insurable interest, and at the time of purchase, all information and personal data must be honestly disclosed. All insurers tend to resolve the claim at the earliest and insurers reserve the right to deny it in case of suspicious or fraud cases. If the insurer learns that the cause of death is due to smoking or tobacco consumption the insurer will deny the death claim and the beneficiary will not be paid the death benefit.

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