Tobacco and nicotine consumption is not only hazardous to health but also puts a strain on your wallets. Usually, all the warnings about smoking habits are unheeded by the smoker. But, be sure your insurance company is serious about it. Smokers have to pay more premium for their term plans as compared to non-smokers. Insurance for smokers might get a bit tricky. To help smokers make the most out of their term life insurance policy, we have compiled this guide.

 

But what exactly is meant by a “smoker”?

 

Any person who uses nicotine or tobacco in any form is identified as a smoker.
 

• Usage of cigarettes, vapes, beedi, and cigars immediately identifies you as a smoker.
• You will also be distinguished as a smoker if you consume gutka and pan masala.
• If you are trying to let go of the habit through nicotine patches and nicotine chewing gums, you will still be identified as a smoker.
• Smoking marijuana products will also affix you as a smoker.

 

How do insurance companies define smokers?

 

Before the insurance companies can approve your term insurance policy, they tend to ask the individual a series of questions. These questions will help them identify the smoker and tobacco consumers. If you conform to any of the questions related to smoking, you will be identified as a smoker. There is no differentiation between regular smokers and occasional smokers. The regular      premium rates are only reserved for people who abstain from all nicotine products.

 

Why do smokers have to pay different premiums?

 

The rate of a life insurance premium depends on a few factors. Life insurance companies use a mortality table to determine the premium rates. The morality table is different for different customer groups. The table shows the amount of risk that the company has to undertake to cover a particular individual.

 

Through scientific evidence and statistical study, it is proven that smokers have a significantly lower lifespan as compared to non-smokers. This is because smokers are susceptible to critical illnesses like bronchitis, lung cancer, and other heart problems. Therefore, the mortality rate amongst smokers is significantly high. Since the risk of death is high, the rate of premium is also different.

 

Insurance companies prefer healthier individuals as their customers because they will retain their policies for a longer period. The non-smokers, hence, get a discounted premium rate.

 

How much extra premium do smokers have to pay?

 

Before deciding the premium amount for an individual, the insurance company considers a lot of factors. Apart from smoking habits, the other factors considered are alcohol usage, age, health, and the amount required at the policy’s maturity. You can use a term insurance calculator to figure out the approximate amount. Tata AIA term insurance plan usually charges 30% more for smokers. Other companies also hike the premium amounts similarly.

 

Can you hide your smoking habits from your insurers?
 

 

It is quite difficult to lie during the verification process of the policy. The insurance company will enquire about smoking habits or tobacco usage in the last 12 months. The insurers also ask for medical fitness certificates. The trace of nicotine can be easily found through your medical tests. If your lie is caught before the approval, then the insurers will reject your proposal.

 

If you get caught after the approval of the term policy, then a couple of things might happen:
 

• After the maturity of the term plan, if the company finds out about the lie, you will be charged with fraud.
• If you get caught while processing the life insurance policy, the policy will be considered null and void. You will not receive any benefits or protection from the policy.

 

However, it should be noted that insurers have the right to reject the death claim settlement on the grounds of misrepresentation within the first three years of the policy. Once the milestone has been crossed, then the insurers cannot reject the death claim request. But the process might become lengthy.

 

You must remember, a term plan is used to protect the future of your family. If you are lying, you are putting your family at risk.

 

What if you quit after the policy is approved?

 

Let us assume that you decide to turn over a new leaf and quit smoking. After about 12 months of leaving the habit, you can discuss with your insurer to revise the premium rates. The reduced premium charges might not get approved considering the lasting damage that has already been done due to extensive smoking in the past. You can also try to negotiate for a lower price during the renewal of your policy.

 

What happens when you develop a smoking habit after the approval of your insurance?

 

If you are a non-smoker but have developed a smoking habit after the approval of the insurance, your premium rates will remain unchanged. Insurance companies have a provision for people who might turn to smoke after the policy approval, but that number is very small. But be assured that if it happens then, your insurer cannot withdraw their approval or declare it null and void. You are within the rights of law to get your maturity amount of the life insurance policy. In case of a misfortunate event, your family will also be provided with the death claim of the term plan without any hassle.

 

Term Insurance for Smokers from Tata AIA Life

 

Tata AIA term insurance plans can be considered if you are looking for affordable life insurance for smokers. Get features such as coverage up to 100 years of age, flexible premium payment options, choice of unique riders^@ and seamless claim settlement process at an affordable rate depending on your smoking habits.

You can use our term insurance premium calculator to determine the exact premium amount you will have to pay for your term plan. The premium rates are calculated with due diligence keeping in mind all the factors that affect the mortality rate.

 

Conclusion

 

While you can search for affordable life insurance for smokers, you will have to give up smoking and all other usages of tobacco products 12 to 18 months before your medical tests. Quitting the habit is easier said than done. But it is not impossible. There are a lot of resources out there to help you achieve a much healthier lifestyle.

 

L&C/Advt/2023/Mar/0792