Term Insurance for Smokers

How Does Term Insurance Plan Work for Smokers?

If a policyholder has consumed tobacco in any form in the past 12 months, then he/she will be categorized as a smoker. In comparison to non-smokers, the premium rates of term insurance for smokers can be almost 30 to 40% higher. There have been various cases where the customers hide the details about their smoking habits from insurers just to save on the extra charge. However, if you are a smoker, then it is very important to inform the same to the insurer.

If the policy buyer provides false or incorrect information about his/her smoking habits, then the insurer can take the below actions against them:

• The policy can be declared invalid or nullified

• Charging the applicant with an insurance fraud

• The plan benefits will be terminated by the insurer

Note: Know what is term insurance first and then buy a term plan for your loved ones.

What are the Best Term Insurance Plan for Smokers in India?

Here are some of the affordable and best term insurance plan for smokers in India offered by different insurance companies:

^~Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. The list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

Note: Check out the best term insurance plan in India and choose one that suits your requirements.

Why Should Smokers Buy a Term Plan?

Smokers are generally at a higher risk of health issues, which increases the chances of an untimely death compared to non-smokers. That is why having a term insurance for smokers becomes even more important for them, to ensure their loved ones are financially protected in case something unexpected happens.

Many individuals try to hide their smoking habits while buying a policy, but this can lead to serious problems later. Term insurance medical tests are usually required before issuing a term plan, and they can easily detect nicotine use. If the insurer finds out about smoking after a claim is made, it could lead to delays or even rejection of the claim. Being honest about your health habits helps you get the right coverage and ensures your family’s peace of mind.

What Are the Types of Smokers As Per the Insurance Company?

All smokers don’t have the same smoking practices. This is the reason they have classified smokers into three types:

• Typical Smoker: Smoker with some minor health problems

• Table-rated Smoker: Individuals having some obvious health conditions owing to smoking.

• Preferred Smoker: Individual who is a smoker but overall he/she is fit and in good health.

What are the Eligibility Criteria for Term Insurance Plan for Smokers?

Term insurance for a smoker is largely different from the non-smoker. Here are some of the things that you should know before buying term insurance for a smoker:

Note: It is suggested to calculate the term plan premium on the term insurance calculator online tool by Policybazaar before buying.

Why Sum Assured is an Important Factor While Buying Term Insurance?

Selecting the right sum assured in your term insurance plan is vital for securing your family’s financial future. It acts as a safety net, offering you peace of mind during unforeseen events. A higher sum assured can help cover outstanding loans, education expenses, and income replacement for your loved ones. Choosing an appropriate amount ensures their needs are taken care of. To explore the right term life insurance options and determine the best sum assured for your goals, click the tabs below.

What Happens If You Do Not Inform the Insurance Company About Your Smoking Habits?

If you are a smoker, it is important to be honest about your habit when applying for a term or life insurance plan. Hiding this information may seem like a way to get lower premiums, but it can have serious consequences later, especially during claim settlement.

How Smoking Affects Term Insurance Claims

Smoking significantly impacts your health risk, which insurers consider while approving your policy and deciding the premium. If you fail to disclose your smoking habit and the insurer finds out, especially during a claim investigation, it could lead to term insurance claim rejection or a reduced payout. In some cases, it may even be treated as fraud.

Risks of Not Disclosing Smoking Habits

When a term insurance claim is filed, the insurer examines the cause of death. If it is linked to smoking-related illnesses, and this detail was not disclosed at the time of purchase, the insurer may deny the claim or reduce the death benefit. This puts your family at financial risk during a difficult time.

Policy Termination and Legal Consequences

If it is found that you withheld your smoking status, the insurer may terminate your term insurance for smokers policy or impose penalties such as increased premiums. In some cases, it may also lead to legal consequences.

Does Smoking Affect My Term Insurance Premium Rates?

Yes, smoking affects the term insurance premium rates. As we all know, smoking is injurious to health, so, how do life insurance companies look at this dangerous practice?

Generally, smokers are required to pay higher premium amounts than those individuals who do not smoke when they buy term insurance for smokers. The simple reason is that smokers have a greater mortality rate than non-smokers.

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

If you are a healthy and non-smoking male of 30-year-old buy a term plan for a sum assured amount of Rs. 1 Crore. The premium amount paid for a 20 years term plan is above Rs. 700 for a month. Whereas for a smoker having the same age, the premium amount may go up to Rs. 900 pm.

Thus, smoking habits do affect your term insurance premium rates.

Note: You should also check the benefits of term life insurance if you are planning to purchase the term insurance plan.

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