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Term Insurance Plans for Smokers: The Detailed Guide

No matter your lifestyle habits, a term insurance plan is always important for keeping your family safe from tomorrow’s uncertainties. And a term insurance plan is all the more necessary for those with smoking habits. Even if you are an occasional smoker, do consider getting a suitable life insurance policy; after all, any amount of smoke is enough to cause damage to your lungs.
 

For smokers, term plans differ from term plans for regular policyholders, naturally, given the greater health risk to a smoker’s life. So, before you understand how you can go about getting a term insurance plan, here is what you should know.
 

Why Must Smokers Have Term Insurance?


Generally, a term insurance policy is important for everyone, irrespective of whether they smoke or not. Smokers may be more susceptible to heart and lung diseases, but it does not mean non-smoking individuals are completely immune to such health conditions. However, if you compare two healthy persons with the same lifestyle habits – with one as a smoker and the other as a non-smoker – there are some definite indicators that differentiate between the two.


Hence, those with smoking habits should certainly plan to buy a term insurance policy with adequate coverage for their dependents/family members. It is also equally important that they purchase the term plan as early as possible since, with every passing year, health risks to a smoker’s life are likely to increase.


One can also add health riders# to their term plan for smokers if they need additional life insurance coverage. Hence, in case of a medical emergency or the policyholder's untimely demise, their family will be able to cover the cost of the treatment and maintain their lifestyle without disturbing their emergency funds or life-long savings.


Types of Smokers Under Life Insurance


It does not matter whether it is one cigarette a day or a few; the damage to a smoker’s lungs and health can often be irreversible. However, since life insurance guidelines are quite meticulous, it is important for life insurance providers to differentiate between varying smoking patterns of their policyholders so that everyone can pay a fair premium amount depending on their smoking habits and the corresponding risk to their lives. Thus, these are three categories of smokers under life insurance:
 

  • Preferred Smoker:

    Preferred smokers have very sparse smoking habits, such as once in a couple of months or on occasion. Despite their smoking habits, such policyholders do not suffer from any related health conditions and are quite fit as any non-smoking individual. Therefore, while their policy premiums may be slightly more than a non-smoking individual’s premium, it is the lesser in the smoker’s term insurance premium category.

  • Typical Smoker:

    A typical smoker has more severe smoking habits as compared to a preferred smoker, as a result of which they may have minor health issues arising from their smoking habits. Though it is advisable that such policyholders get medical help to gradually reduce or quit smoking, most life insurance companies will not deny them the benefit of a life cover. However, given the risk to their health, the premiums on their term policy will be slightly more.

  • Table-rated Smoker:

    Table-rated smokers are regular or heavy smokers who suffer from obvious health issues due to their smoking habits. Again, a life insurance company will not deny term insurance coverage to such policyholders; however, the premiums charged for this category of smokers will be more. While table-rated smokers wanting to quit may not be able to reduce their premiums, they can improve their health and lead a more comfortable life.


What to Remember While Buying Term Plans for Smokers?


When seeking out term insurance plans for smokers, it is important to understand how the term plan will work for your family. With the help of the following pointers, you should be able to choose a suitable term plan:
 

  • Premium rates:

    When comparing policies, check the difference in the premium rates so that you can opt for a reasonable premium amount.

  • Rider# Options:

    The fine print in your term insurance plan can help you understand how your term plan can protect your family. In case you want to add health riders# to your term plan, be sure to check for a waiting period for any pre-existing health condition or whether you should opt for another rider# instead. Since premiums for smokers are already more expensive, consider the riders# carefully.

  • Maximum Coverage:

    The maximum limit for term insurance coverage may be subject to the life insurance company’s underwriting guidelines. However, when choosing coverage, consider your family’s needs and any possible emergencies. Suppose your unfortunate demise is preceded by an illness; the sum assured should be able to cover the treatment as well as your family’s future.

Conclusion


There is no doubt that no good can come from one’s smoking habits; however, this should not come in the way of securing your family’s financial future. Very often, occasional smokers choose to first give up smoking entirely before buying a term plan. Therefore, whether you buy your term plan early or late in life can play an important role in your premium amount. And if you have very little to no smoking habits at all, you can always take steps to improve your health and get term insurance for a reasonable premium.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

Do smokers need to buy more than one term plan?

No, you do not need multiple term insurance plans if you are a smoker. You can have one term plan with adequate coverage. Since the premiums of your term plan will be more than a non-smoker’s premiums, it is better to choose just one term insurance plan. Moreover, as a smoker, you may have to undergo medical examinations before buying your policy, which means a great amount of hassle if you opt for more than one term plan.

Can I calculate my premiums before I buy term insurance?

Yes, you can use a term insurance premium calculator to understand the premium amount you will need to pay. This can help you choose a sum assured, policy term and premium paying term as per your needs and also allow you to plan your finances so that you can pay your premiums on time and receive uninterrupted term insurance coverage.

Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.