How to answer the question on ‘Smoking’ while filling the insurance form?

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Did you know that the premium for a smoker can be as high as 50% compared to a non-smoker1 ? This is because of the higher risk associated with smoking.

Keeping this in mind, it’s all the more important that you answer the question right. So let’s look at the different scenarios and how you may want to answer that question:

1) Long-time smoker, no more:

 

Let’s say your friend used to smoke regularly for years, but has stopped. In such a scenario, the key lies in the time gap. A lot of insurers ask how many years it has been since the insured stopped smoking. 1 year? 3 years? More? Every insurance company has a different threshold. Aditya Birla Sun Life Insurance, for example, considers a person as a non-smoker if they have not smoked or consumed tobacco for 5 continuous years.

2)  Occasional smoker:

 

Insurance policies are a contract of utmost good faith. You are required to disclose your current and past details. This includes details about your lifestyle and health.

Typically, insurance companies require you to take a medical test before issuing the policy. One of the tests checks for nicotine and/or cotinine in your body. It can trace the actual quantity of nicotine or cotinine in your system. This, according to Web MD, can “tell whether you’re an active smoker or if you’ve recently quit”. So the risk you run is getting caught through a medical test. Even if it doesn’t, this can still affect a future claim.

Before processing a claim, the insurance company will investigate the case. If, on such an investigation, nicotine or cotinine or a smoking habit is discovered, then the claim may be rejective. The insurer can simple say that this is a breach of utmost good faith.

So, it’s a simple question—is the higher premium really as costly as the potential claim amount?

1 Money control report

The purpose of this content is to provide information about industry trends and news of general interest of our customers, potential customers and other professionals. While every attempt is made to ensure the accuracy of the information provided, we do not guarantee the accuracy of the information. ABSLI recommend that these general views should be cross-verified and reaffirmed before being used for personal financial planning purpose. The recipients of this material should rely on their own investigations. The past performance is not necessarily an indicative of the future performance.

ADV/4/21-22/73

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