What If I Start Smoking After Taking Term Insurance In India?

Who Is Considered A Smoker By Insurance Companies?

Any person who consumes tobacco or nicotine products, like cigarettes, beedi, gutka, cigars, flavoured paan masala, khaini, nicotine patch/chewing gum, vapes, etc. is considered a smoker or tobacco consumer. Life insurance companies ask tobacco-related questions to the person willing to buy term plan in different ways, followed by requesting medical test results that prove if the applicant has been consuming nicotine/tobacco in the recent past or not. Below are some of the common questions that are asked of an applicant about the term insurance smoking clause:

• Do you take/consume nicotine or tobacco products?

• Have you consumed any tobacco products in the past 4 years?

• Did you ever consume tobacco products in your life?

Your answer to these questions will determine whether or not you are a smoker. If the answers are positive, you will be declared a smoker, and vice versa. The following are the categorisations that classify a smoker or non-smoker:

• Non-smoker: Someone who does not smoke

• Preferred smoker: Someone who smokes and is healthy and fit

• Typical smoker: Someone who smokes and only has minor health problems

• Table-rate smoker: Someone who smokes and has visible health issues

What Effect Does Smoking Have On Term Insurance?

Smokers are usually considered to have a low expectancy, which categorises them as individuals who are more prone to chronic ailments, like lung cancer, heart problems, bronchitis, etc. Since their life span is shorter than most healthy, non-smoking people, life insurance companies charge them an increased premium rate, as they are a visible risk to the company. 

For example, Mr. Kishore, a 52 year old non-smoking male, will pay Rs. 3,847 premium per month for 1 Crore term insurance until the age of 65, in comparison to Mr. Anmol, a 52 year old smoking man, who will pay Rs. 4,731 premium per month for the same life cover and policy term.

*You can use a term insurance calculator, to check the impact of smoking on premium rates for your profile

What Happens If You Start Smoking After Taking Term Insurance?

Here are a few possible outcomes if you start smoking after you buy the best term insurance policy in India:

• Putting family at risk
  You purchase a term plan keeping in mind that your family/dependents are secured in your absence. Therefore, if you start smoking, you are putting your own life at risk, as there is a high chance that you will develop a chronic disease and be more vulnerable to declining health, which will ultimately result in your untimely death.

• Insurer increasing your premium
  Term insurance premiums remain the same in most cases if you start smoking after buying term insurance, but the premiums may increase at renewal in some cases as per the term insurance smoking clause. Since you are now more prone to health diseases, after you began smoking, the insurance company could re-evaluate your life insurance plan and charge you an increased premium rate at renewal. However, if there is a change in your smoking habits, you must always inform your insurer.

• Non-disclosure of Smoking Habits
  In case you lie on the term insurance application about your current smoking habits, like not disclosing that you are a smoker, the insurer may later reject your family’s claim on the basis of non-disclosure per the term insurance smoking clause. The insurer might delay your family’s claim payout/claim settlement during the verification process. Therefore, it is best to accurately inform the changing smoking habits to your insurer to ensure your family doesn’t suffer in the long run.

What Happens If You Quit Smoking After Taking Term Insurance?

While there are various benefits of term insurance, smokers are usually charged a higher premium due to their decreased life expectancy. In case you have quit smoking or consuming tobacco products after buying term insurance, then you can request your insurance company to recalculate your premium rate at the time of policy renewal. By doing so, the insurer will ask for medical test reports to be confirmed of your changed smoking habits and consider altering your premium rates as per the term insurance smoking clause. Although some insurers do not allow change of plan during mid-term, some insurers consider the non-smoking status of a policyholder if he/she has not smoked for atleast 2 years. 

However, you must not lie about your smoking habits to the insurer, or else there is a high possibility that the insurance company will cancel/reject your policy completely, and you may be charged with fraud. Moreover, by lying about your smoking habits, you are also putting your loved ones’ financial protection at risk. Therefore, it is important that you take serious action against your smoking habits and never hide the truth from your insurer while buying term insurance for smokers.

Wrapping It Up!

Smoking is a habit best avoided. It pollutes your body, the environment and your financial situation. Moreover, it makes you vulnerable to a lot of health issues that attack prematurely. If you are considering buying term insurance for your loved ones, then now is the best time to quit your smoking habits.

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