Term Life Insurance Plan for Smokers vs Non-Smokers

Madhav, a 30-year-old, is an occasional smoker. He does not disclose his smoking habits when applying for term life insurance, under the assumption that it will not affect his application since he does not smoke regularly.

However, the insurer finds out that he is a smoker during the verification process and rejects the application right away on the grounds that he has hidden his smoking habits from the declaration.

So, Madhav’s case clearly shows that the insurer has the right to reject the application in the event of non-disclosure of any crucial information, including lifestyle habits.

Having said that, there is always a common question among people as to whether smokers qualify for term life insurance. If so, how much does an insurer charge for a smoker and a non-smoker? And how do they categorise smokers?

All of these questions will be answered in this article.

Generally, individuals are classified into two types by insurance companies.

• Smoker
• Non-smoker

Term insurance policies are pure risk covers that provide risk coverage on your life for a set amount of money over a set period of time. Your premium may vary based on which category you fall into.

If you maintain good health and don't smoke, the insurer will approve your term insurance proposal standard prices. In order to qualify for a standard non-smoker rate, you must not have consumed nicotine for a specific time period. Some insurers may check if you have not smoked in the past 12 months, whereas some will check if you have not smoked in the last 3 years, and so on. Insurance companies have higher rates for smokers.

When you answer "Yes" to the question about smoking on your application, a life insurance company will consider you a smoker. Generally, you will be classified as a smoker if you smoke cigarettes, cigars, hookahs, e-cigarettes, gutkha, chew tobacco, etc. This, however, will vary across insurers. You may fall under the smoker category even if you use nicotine patches or gums. Life insurance companies usually check any form of nicotine use.

While filling out the application form, you may be asked questions about smoking habits, like -

• Do you smoke?
• Have you consumed any tobacco or nicotine products?
• When was the last time you smoked?
• How often do you smoke?
• How many cigarettes do you smoke in a day?

Whether you consume nicotine products on a regular basis (within a specified time frame) or smoke a few cigarettes occasionally, you should mention the same in your application, and the insurer will regard you as a smoker.

The premiums for term life insurance plans for smokers are 1.5-2 times higher than those for non-smokers. Smokers are more likely than non-smokers to suffer from health conditions, which explains the higher premiums. Since term life insurance has very competitive rates, life insurance companies will thoroughly examine your medical history, particularly for non-smokers, by examining blood and urine samples - to ensure that they are not putting themselves at risk.

Sometimes, smokers may refrain from disclosing their smoking status to insurance applications due to higher premiums. However, it is possible for insurers to identify smokers who claim to be non-smokers during the underwriting process. And, this may result in your application being rejected. So, no matter how hard you try to hide it, the truth will eventually come to light.

Additionally, life insurers conduct pre-issuance verification calls in which applicants are once again asked about smoking. Such conversations provide the opportunity to ask contextual questions, which can help identify individuals who are intentionally trying to hide their smoking habit.

Moreover, a life insurance company can call a policy in question within three years after it has been issued, even without a claim. If you are honest about your smoking habits from the beginning, there won’t be any issues for you or your family.

Note: The premiums have been taken on 27.01.2023.

Smoking is injurious to health - as everyone knows. But did you know that the premiums for smokers are higher than for non-smokers, and the terms of their policies differ according to their health status? But, no matter what lifestyle you lead, whether you are a smoker or a non-smoker, it is important to purchase a suitable term life insurance plan that ensures your family's future is not compromised - in your absence.

So, compare and find the best term insurance at the best premium possible and make sure that your family is adequately covered. You never know what the future holds for you. And, that's why you need to secure your family's financial future in case of unforeseen events.