Many smokers have the mistaken belief that they can’t carry life insurance because no company would approve their application. While smokers can expect to pay more for a life insurance policy, not every company will deny an application outright. From the insurance company’s perspective, smoking is a lifestyle choice and is no different from someone who overeats or drinks alcohol to excess. Each carries unique health risks that the life insurance company rates accordingly.
How Smoking Can Affect Life Insurance Premiums
Depending on the company providing coverage, smokers may pay up to four times more for the same life insurance benefits as someone who does not smoke. However, it’s important to keep in mind that smoking alone does not determine the premium rates for approved applicants. The life insurance underwriter also considers age, weight, whether the applicant is generally in good health, family health history, and other factors.
Another thing that surprises smokers is that some life insurance companies determine rates based on how much and how often the applicant uses tobacco products. Those who are only occasional smokers could end up paying significantly less for their life insurance policy.
Underwriting Criteria for Smokers
Life insurance companies ask questions on the initial application to determine if someone is a smoker. These typically include:
- Has the applicant used any tobacco product even one time in the past year?
- Is the applicant currently using nicotine gum, a patch, or another smoking cessation product? Has he or she used any of these products in the past 12 months?
By asking these questions, the underwriter is trying to determine whether the applicant regularly uses any form of tobacco or has used it in the recent past. After reviewing the entire application, the underwriter assesses the risk to the company to provide life insurance to the applicant.
The Medical Examination for Smokers
Before the life insurance provider approves an applicant for coverage, he or she may need to submit a medical examination, which typically involves the following:
- Verifying the height and weight listed by the applicant
- Blood pressure check
- Investigation of pre-existing conditions and any genetic pre-disposition the applicant may have to a serious health condition
- A test that measures if the applicant has cotinine, a chemical in several nicotine products, present in the urine or saliva. If the applicant didn’t disclose nicotine use and the medical exam uncovers it, the life insurance company will most likely discontinue the underwriting process and deny coverage.
Consequences of Committing Fraud on a Life Insurance Application
If an applicant states that he or she is a non-smoker on the life insurance application and somehow passes the medical exam, there’s always the risk of the company discovering the truth later. Life insurance providers investigate the medical records, recent health information, and the circumstances of a policyholder’s death for every claim it receives. Should the insurer discover that the applicant provided false information regarding smoking, the family of the deceased would not receive any benefits. They would only receive a refund of the policyholder’s premiums.
How Life Insurance Companies Classify Someone as a Smoker
Most life insurance providers classify someone as a smoker if he or she has smoked cigarettes or cigars at any point during the past year. That includes chewing tobacco and dipping.
Tips for Smokers Applying for Life Insurance
Smokers shouldn’t assume they must accept coverage from a life insurance company just because they received approval. For something as important as life insurance, it’s essential to compare rates and benefits as well as negotiate whenever possible to get the best possible coverage. The following tips may also prove useful:
- People interested in life insurance should buy it as early in life as possible. Smokers in their 20s and 30s have the best chance of finding affordable rates, especially if they don’t have any other lifestyle factors insurers consider risky and are in good health.
- Life insurance companies typically charge premiums based on the range of coverage provided to the applicant. For example, a person would pay more for $250,000 to $300,000 worth of benefits than they would for a $249,000 payout. Therefore, it makes good financial sense for applicants to consider what their family would need to survive after their death since it could cost significantly less to drop to a lower coverage category.
- All people who hold a life insurance policy should review it at least once every three years to see if lower rates are available. That is especially important when life circumstances change, such as the policyholder quitting smoking. Most life insurance companies allow former smokers to switch to the non-smoker rate if they can prove they have been completely tobacco-free for at least one year.
The best way for people who smoke to find an adequate life insurance policy is to apply to several companies and compare benefits. Some insurers have stricter underwriting criteria than others, so asking about smoking upfront will save time and hassle if the company wouldn’t even consider an application from a smoker.