The increased mortality rates associated with smoking, particularly the risks of severe lung diseases and cancer, result in higher insurance premiums for smokers. However, this also means that it is crucial for smokers to buy term plans to make sure their family members are financially secured in case something happens to them. In this article, we will understand the importance of term life insurance policies for smokers and how they can buy term plan easily from Policybazaar.Read more
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Indian insurance companies categorize smokers and non-smokers in the following way:
Non-smoker: An individual who does not smoke.
Preferred Smoker: A person who smokes but maintains fitness and good health.
Typical Smoker: A person who smokes and experiences minor health issues.
Table-rate smoker: An individual with evident health problems resulting from smoking.
As discussed, a term insurance policyholder is categorized as a smoker in case he/she has consumed tobacco in any form in the last 1 year (12 months). The term insurance premium rates for an individual who smokes are around 30-40% are higher than non-smokers. Smokers sometimes do not inform their smoking habits to save additional charges. However, if you’re a smoker then it is very crucial to inform this to the insurer.
In case the policy buyer gives false or incorrect details about their smoking practices because of increase in premiums, the insurer can take the following actions:
The plan can be declared invalid or nullified
The benefits of the plan cannot be provided by the insurer
Charging policyholders with insurance fraud
Usually the tobacco consumption is determined in the nicotine test for term insurance or the medical tests that are required before buying term insurance. However, if you do not disclose your smoking habits to the insurer, you will face the below mentioned consequences:
The policyholder could be charged with attempt of fraud
The insurer can claim the policy as null and void.
Being dishonest with the insurance company puts your loved ones’ security at risk. It's important for the policyholders to not lie about their smoking habits because insurers treat smoking as a serious condition and are very strict if they later discover false information.
*Note: You can use the term insurance calculator to quickly and very efficiently calculate your term insurance premium amount of your term plan.
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Smokers tend to have a lower life expectancy ratio due to their increased vulnerability to chronic conditions like lung cancer, bronchitis, and heart problems. Their potential for a shorter lifespan compared to non-smokers makes them higher-risk individuals for insurance companies. Hence, insurance companies generally impose higher premiums on smokers compared to non-smokers.
For example, Raju, a 35 year old smoking male, earning a salary of 10 Lakhs per annum, bought a life insurance policy of sum assured, ₹ 1 Crore for his loved ones, and continues to pay ₹ 1100 per month as his premium. On the other hand, his friend Ramu, a 35 year old non-smoking male, earning the same annual salary, bought a sum assured of ₹ 1 Crore, pays a premium of ₹ 1890 per month.
Here are the consequences if you quit smoking after buying term life insurance:
If you quit smoking, you can ask the insurance company to adjust your policy premium in the next renewal cycle.
The insurer might lower the premium based on how long you've been smoke-free.
Different insurers have their own rules, but typically, you need to stay away from nicotine for at least two years to be considered a non-smoker.
*Note: It is recommended for all NRIs living in Canada that they firstly know what is term insurance and what its features are before they buy their ideal plan.
Smokers can easily buy term insurance from Policybazaar in the following way:
Step 1: Visit Policybazaar’s official website and go to Term Insurance
Step 2: Enter your basic personal information like name, date of birth, contact number, gender, and Email ID
Step 3: Click on ‘View Plans’ to see the available plans
Step 4: Fill in your annual income, educational qualifications, and smoking habits
Step 5: Select the protection plan most suitable for you and proceed to pay
Step 6: Choose your preferred paying method and pay to complete the purchase process
Quitting smoking and tobacco is a double benefit – improved health and reduced insurance costs. It not only leads to a healthier life but can also result in lower term insurance premiums.