Term Life Insurance: Smoker vs non-Smoker

Let’s understand the difference between term insurance premiums for smokers and Non-smokers:

How Insurers Define Smokers?

An individual who consumes Nicotine or tobacco is a smoker according to the Insurance Companies. The individual who can consume smoke or smokeless tobacco or nicotine such as gutka, bidi, cigarette, pan masala, etc is considered a smoker. It is always advisable to inform the respective insurer about your smoking habits. While filling out the form, insurers ask a question in different ways to determine if an individual smoke or not. Some of the common questions asked by the insurer are:

• Do you smoke?

• Have you consumed nicotine/tobacco products?

• What was the last time you smoked?

• How many cigarettes do you smoke in a day?

• How often do you smoke?

Note- Insurance companies can also ask you about your past medical records.

How Do Insurance Companies Categorise Smokers and Non-Smokers?

The smoking habits of all the insurers are not the same and which is why some insurance providers have categorized smokers into different types:

• Preferred Smoker – An individual who smokes but is fit and healthy

• Non-smoker – An individual does not smoke at all

• Typical Smoker - An individual who smokes and has minor health problems

• Table-rate smoker- A person who has severe health issues because of his smoking habits

As we have discussed above, both smokers and non-smokers are eligible for availing of term insurance policies. However, the classification of smokers into different categories helps insurers to decide the premium price for various individuals based on their smoking habits.

Term Life Insurance Smoker vs Non-smoker

Why do Smokers Pay Higher Premium Prices for Term Insurance Than Non-Smokers?

Generally, smokers pay higher term insurance premium rates than non-smokers at the time of purchasing term insurance.

As you all know, smoking is not good for health and it leads to chronic and severe illnesses such as heart diseases, lung cancer, respiratory diseases, and bronchitis. Thus, the risk of being infected by such diseases is higher in smokers than in non-smokers. Smokers also have a lower life expectancy ratio. Smokers are required to pay higher premiums as compared to non-smokers because of their low life expectancy.

What If I lied to an Insurer about my Smoking?

A lot of smokers, often lie about their smoking habits to the insurance company to avoid paying higher term insurance premium rates. But this is quite risky and unproductive. You can hide your details while filling out the proposal form for term insurance, but it is very difficult to avoid the nicotine traces in the urine sample that is taken during medical check-ups or examinations. However, hiding details from the insurer might create a problem at the time of claim. In such cases, insurers have the option to terminate the policy and charge a fraud case against the policyholder.

Let’s understand this with the help of an example:

Imagine, if somehow you have been registered as a non-smoker in the insurance company and if you die one day because of your smoking habit. At that time insurance company will get to know that you were a smoker at the time you purchased the policy. Then, in such cases, they can deny the claim request immediately.

Which Term Insurance Plan to Choose: Smokers vs Non-Smokers?

A chain smoker with a heavy smoking habit is always advised to choose a term insurance plan which offers a large amount of sum assured at a minimal premium charge. These types of plans would be more pocket-friendly for you and will provide financial protection to your family in case of any unfortunate incidents.

And if you don’t smoke, it is always a good idea to keep you and your family secure for tomorrow with a term insurance plan.

At A Closing!

Whether you are a smoker or a non-smoker, always inform the insurer. Do not hide any information as it will create problems in the future for you and your family. The premium prices are higher for smokers as compared to non-smokers and their terms and conditions also vary based on their illnesses. Choose the right term plan wisely that provides you with a better tomorrow.