Life Insurance For Smokers

 To help you find the right life insurance policy, the below guide has answers to all questions that a smoker might have. 

How do life insurers define smokers?

A smoker is a person who uses tobacco/ nicotine in any form, be it cigarettes, cigars, gutka, beedi, khaini, flavored pan masala, nicotine patch or chewing gum. Life insurers have different ways in which they ask questions to check the smoking habit of a person. Some of the common questions posed by insurers are:-

• Do you consume tobacco/nicotine products?

• Have you used a tobacco product in past four years?

• Have you ever consumed tobacco product?

If your answer to any of the above questions is yes, you will be classified as a smoker. Also, insurance companies do not differentiate between an occasional smoker and a frequent smoker. Insurers only quote low premium to those who have stayed off from cigarettes and nicotine products completely. Even if you smoke occasionally, you will fall into the smoker category.

How Insurance Companies Categorise Smokers and Non-Smokers?

• Non-smoker: Person who doesn’t smoke

• Preferred Smoker: Person who smokes and is fit and healthy

• Typical Smoker: Person who smokes and has minor health issues

• Table-rate smoker: Person has visible health problems because of smoking

Does smoking affect life insurance premiums?

Smokers have a low expectancy ratio as they are more susceptible to chronic ailments such as lung cancer, bronchitis and heart problems. They may have a shorter life span than non-smokers, making them risky for an insurance company. As a result, insurance companies will charge smokers a higher premium than non-smokers.

For example, Manjeet Singh, a 45 year old smoking male, earning a salary of 11 Lakhs per annum, purchased a life insurance policy of sum assured, Rupees 1 Crore for his loved ones, and continues to pay Rs. 4,870 per month as his premium. On the other hand, his friend Manoj Sahni, a 45 year old non-smoking male, earning the same salary, purchased a sum assured of Rupees 1 Crore, pays a premium of Rs. 2,903 per month.

How much extra premium is charged from a smoker?

The extra premium to be paid varies from one insurer to another. Besides smoking habits, the insurer also considers various factors during the computation of premium such as age and health. Check the following table to know the difference between premium of a smoker and non-smoker.

*Above calculation is done for a 30-year old man who is staying in Delhi and looking for Rs 1 Crore sum assured coverage.

What happens if you hide smoking habits?

Lying at the time of filing policy application is equal to fraud and will lead to the following implications:-

• Individual can be charged with fraud

• Insurer can consider the policy null and void  

Remember, term insurance ensures that your loved ones stay financially secured in the event of your death. Lying to the insurance company puts your family’s security at risk. The customer needs to be honest about their smoking habits because life insurers take smoking as a serious condition and are extremely tough if they later find any false declaration.

What if you quit smoking after buying term insurance?

If the policyholder quit smoking, they can request the insurer to recalculate the premium of the insurance policy at the time of policy renewal. The insurer may cut the premium rates depending upon the amount of time elapsed since the policyholder last smoked. While every insurer has its own rules for someone who quit smoking, usually an insured should stay away from nicotine for at least two years before they would be called non-smoker.

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