What Smokers Should Know About Life Insurance

It’s no secret smoking can impact your health, but did you know it can impact your life insurance rates? And it’s not a small difference. Smokers can pay thousands more in premiums over the life of their policy.

So, you know you need life insurance, but you’re not ready to kick the habit. There are some things you should know going into the application process.

Why Smokers Get Different Rates

Life insurance rates are determined by life expectancy and risk. Because we know that smoking increases early mortality, it’s factored into your risk assessment.

And while you may be young and not currently experiencing any of the health effects of smoking, your rate will be determined by your behavior, not your symptoms. Simply being a smoker will typically increase your rates.

What Makes Someone a Smoker

Cigarettes are the most popular form of tobacco consumption, but life insurers will ask if you use any of the following:

  • Vaping & e-cigarettes
  • Bidis (thin hand-rolled cigarettes)
  • Cigars
  • Pipes
  • Hookahs
  • Chewing tobacco
  • Snuff
  • Dissolvable tobacco
  • Nicotine replacement therapies (patches, lozenges, gum, inhalers, nose sprays)
  • Heated tobacco products
  • Nicotine patches or gum
  • And even marijuana depending on the frequency of use

Some insurers will classify you as a non-smoker if you smoke less than one cigar a month.

And many insurers take into account how long you’ve quit smoking cigarettes when deciding your rate. It’s not one-size fits all pricing and often works on a sliding scale.

The Rate Gap

There’s no way around it. If you’re a smoker, you’re going to see some high quotes for life insurance – often double or triple the non-smoking rate. As always, your age, gender and the desired coverage will create variation in the numbers, but one study recently made an apples-to-apples comparison with online quotes to give you a sampling of the rate gap for a 20-year, $500,000 term life insurance policy.

Gender and age             Non-smoking average rate             Smoking average rate             Rate increase for smokers
Male age 30 $303 $828 2.7 times higher
Male age 40 $397 $1,531 3.9 times higher
Female age 30 $281 $670 2.4 time higher
Female age 40 $344 $1,199 3.5 times higher

Honesty is the Best Policy

You self-identify as a smoker when you apply. And while it might seem easy to omit this information, particularly if you smoke only occasionally, it’s not only dishonest, but can haunt your beneficiaries.

Insurance companies can verify the claims you’ve made on your application. Often with a medical exam, or with medical records, blood tests or urine samples. Even previous life insurance applications are compared to your current one.

But I Quit Last Year

Congratulations! It’s in your best interest to disclose this information. And typically, most insurance companies will consider you a non-smoker after 12 months nicotine-free.

Smoking Post-Policy Purchase

Your rate is locked. Although we wouldn’t suggest it, if you take up recreational piloting or chain smoking after you buy a policy, insurers cannot raise your rates. However, statistics show most smokers begin in their teens, rather than picking it up later in life.

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Source: Forbes “What Smokers Should Know About Life Insurance”

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