What If I Start Smoking After Taking Term Insurance?

Ritvik and Roshan want to buy term insurance to secure their family. Ritvik doesn't disclose his smoking habits while filling out his application form. He believes that it won't affect his application given that he does not smoke regularly. However, during the verification process, the insurer finds that he has hidden this information from the declaration and rejects the application immediately.

Roshan has no health conditions or any lifestyle habits at the time of purchase, so he is able to obtain the policy at a standard rate. However, he starts smoking a year after buying the policy. Now, he is scared that this might affect his policy. However, when he contacted the insurer, they said there will be no changes to his policy.

Now, you may wonder why the insurer didn't make alterations to Roshan's policy. This article will answer your question.

What Term insurance is

Term life insurance provides a cost-effective solution for securing your family's financial future. It provides coverage for a defined period in exchange for a specific fee called "premium".

When you buy a term insurance plan, you are securing your family's financial future, meaning, they won't have to struggle to meet their needs and goals when you are long gone. It pays your family a sum of money (called the Sum Assured) if you pass away while the policy is active. This money can help them take care of any existing obligations and provide them with financial stability, allowing them to live the life they deserve.

The purpose of term insurance is to cover pure risks. So, you cannot expect any benefits from the policy if you survive until the end of the policy duration. By investing in a term insurance policy today, you are taking a thoughtful step to ensure your family's financial future. In fact, you would have secured the same when you had no lifestyle habits. However, life is full of unexpected changes and as years pass by, your habits and lifestyle may evolve. An example of such a change could be starting to smoke after obtaining term insurance. And, you may wonder if such a change can impact your policy.

What Happens If I Start Smoking After Taking Term Insurance?

When you apply for term insurance, you will be asked to fill out the application form. It may contain several questions, including questions about smoking habits, such as:

1. Do you smoke?
2. Have you consumed any tobacco or nicotine products?
3. When was the last time you smoked?
4. How regularly do you smoke?
5. How many cigarettes do you smoke in a day?

You need to provide accurate and honest answers to these questions. This will help the insurer get a precise assessment of your health.

Based on the assessment, insurers classify applicants into two types - A. Smoker B. Non-smoker

Your premium will vary depending on what category you fall into. Term life insurance premiums for smokers are 1.5-2 times higher than those for non-smokers. This is because smokers are more susceptible to health conditions such as lung diseases, heart problems, etc. than non-smokers.

So, some people believe that if they disclose their smoking habits which they’ve begun after purchasing a policy, the insurance company will eventually increase their premiums. It's not true. Insurance is a contract of utmost good faith signed at the time of submitting the proposal form, and any changes afterwards don't affect the contract. So, if you begin smoking after receiving your term insurance policy, the insurer typically does not need to be notified. This means that your policy will remain valid with no impact on your existing coverage. So, you can be assured that your nominee will not be denied a payout simply because you started smoking after purchasing the policy.

What If You Hide Your Smoking Habit to Your Insurer?

Sometimes, smokers may refuse to disclose their smoking status to the company fearing high premiums. This can be a risky move leading to significant financial repercussions as it all likelihood your claim will be rejected for non disclousre of material facts by you at the time of entering into contract with the insurance company

But, how do insurers find out whether you smoke or not?

Smokers who claim to be non-smokers can be identified during the underwriting process by conducting a nicotine test. So, if you conceal your smoking habit when buying a term insurance policy, and the insurer discovers it, your application may be rejected. Your attempt to save a few bucks on your premiums may leave your family without the protection they need. Hence, it is clear that you can't hide the truth forever.

As mentioned earlier, the insurance contract operates on the principle of utmost good faith. So, both parties must disclose all material facts at the time of the purchase. Be honest and open when answering the questions on the proposal form during the application process, especially when it comes to medical information or lifestyle habits. If you attempt to conceal any details from the insurer, they will likely be able to detect the same through the sophisticated medical tests available today.

So, in case you smoke before purchasing term insurance, make sure you tell your insurer about it. The same applies if you have quit smoking as well. This is to ensure that the insurer has a full understanding of the risks associated with the policy, and can offer the best coverage possible.

Wrapping up!

If you begin smoking after buying a term insurance policy, your premiums will not be affected and your coverage will remain intact. However, regardless of whether you smoke or not, it is always necessary to provide truthful information to the insurer to ensure that your policy remains valid and that your loved ones are financially protected - should the worst happen. Remember, honesty is the best policy - not only in life but also when obtaining insurance.