February 15, 2013 / 15:03 IST
Deepak Yohannan
MyInsuranceClub.com
Smoking, primarily of tobacco, is an activity that is practiced by some 1.1 billion people, and up to 1/3 of the adult population. Now, if one-third of the world’s adult population indulges in smoking and is adding risk to their health and life, it is only fair that the insurance companies factor the same in pricing their products.
It’s no surprise that smokers pay more for life insurance, when compared to non-smokers, given that all other things are equal. If your insurance company tags you as a smoker, they place you in the smoker risk category which means your premium will be higher than it is for non-smokers. It’s a fact that the mortality rate for smokers is much higher than it is for those that do not smoke.
Below are some common questions and answers that may be helpful for a person who smokes (or was a smoker) and is planning to buy a life insurance policy.
How do most of the life insurance companies define smokers?Life insurance companies use very specific questions to classify you as a smoker or not. Being defined as a smoker refers to your use of cigarettes, cigars and chewing tobacco. Even using a nicotine patch or gum can qualify you as a smoker. Basically, the insurance companies are looking for any form of nicotine use. Life insurance companies have different ways in which they ask the question to identify whether a person smokes or not. The common styles in which the question on an application form is posed are –
1. Do you consume tobacco products?
2. Do you smoke?
3. Have you used a tobacco product in the last five years?
4. Have you ever consumed tobacco products?
If your answer to the question is “Yes” then you will most likely be considered a smoker. As a result you will be charged a higher premium rate.
How much extra premium will be charged if I am a smoker?The extra premium levied on a person varies from company to company. You will have to request quotes from multiple life insurance companies and see the premiums charged by each of them for the same coverage amount. There is bound to be a significant variance among insurance companies. Moreover the company also considers other factors during the computation of premium such as - the type and amount of life insurance, your age, and your health.
I am only a social smoker. Will I still be charged higher?Insurance companies generally don’t differentiate between an occasional smoker and a frequent/regular smoker. Even if you only have the occasional cigarette, this still counts against you when it comes to life cover. The logic being, health risks are basically the same and therefore the rates.
If someone mentions themselves as a non-smoker at the time of taking out a policy, but he/she has the odd cigarette socially, then the declaration of “non-smoker” is not really valid. Insurers are strict in their definition, and will only quote cheaper non-smoker life insurance rates to those who have stayed off cigarettes and nicotine-replacement products completely.
What happens if I lie about smoking?Lying at the time of application for an insurance policy is considered as insurance fraud. There can be severe consequences for lying. Let’s say - You clear your medical exam and secure an insurance policy as being a non-smoker. If you die and the insurance company learns that you were a regular smoker, then your life insurance claim can be rejected.
It is better to tell the truth from the very start and just accept the fact that if you smoke you will have to pay more for your policy. Remember why we take a life cover in the first place: It is to ensure that our loved ones will be financially secure in the event of our death. Lying to the insurance company puts that security at risk on our family.
The author is CEO of MyInsuranceClub.com and can be reach at deepak@myinsuranceclub.com 
