The Impact of Smoking on Life Insurance

We all know that smoking is bad for your health, but did you know that it can be an expensive habit in more ways than one.

Yes, the cost of a packet of cigarettes these days is sky-high, however continuing to smoke could have an impact on your finances in others ways too.

Tobacco smoking could be a major factor in the price you pay for life insurance.

Due to the known risks involved with smoking, a smoker could pay around 50% more than a non-smoker for the same life insurance policy.

Insurance providers calculate the price of premiums on risk, which can include your age, medical conditions and whether or not you smoke.

Statistics show that smokers are more likely to suffer from a chronic illness or a premature death and therefore more likely to file a claim than someone who has never smoked.

How do insurance companies class a smoker?

It’s pretty black and white with insurance companies when it comes to smoking and life insurance. If you’ve smoked a cigarette in the last 12 months you’re a smoker whether you’ve a twenty a day habit or you just have an occasional smoke on a Saturday night.

Even if you’ve recently quit, you’ll still be classed as a smoker. Usually you need to be smoke-free for a minimum of 12 months before you’re classed as a non-smoker for insurance purposes.

What happens if you lie about your smoking habit?

It’s all too easy to lie about the fact you are a smoker in order to keep the cost of your life insurance premium to a minimum, however there are other ways that you could be caught out.

Additional medical questions may reveal that you are actually a smoker, or at least imply that you could be. Although the majority of insurers will underwrite your policy without a medical check, providers often perform random checks on the medical history of a small percentage of applicants, particularly if they suspect them of being dishonest.

What if I’ve lied, and need to make a claim?

If a claim is made on your policy and medical records show that your death was related to a smoking-related illness, then the insurer typically has two options.

Firstly, it’s simple – they won’t pay your claim. No matter how much you’ve paid into your premiums the insurer could simply void your policy.

The alternative option would still be to offer a payout, however it may be significantly less than you were expecting.

If you are found to have been dishonest in order to pay cheaper premiums and in reality should have been paying 50% more than you had been, the insurer could choose to adjust your benefit accordingly. This may mean that your beneficiaries will receive 50% less than the original sum insured.

How can I get a cheaper life insurance policy?

The only sure-fire way of paying less on your premium is to give up smoking and make sure you are completely smoke-free before you apply for a policy.

As you can see from the information above, it is unlikely to pay off by being dishonest so quitting smoking is the only viable option that will see you paying less on your premium.

Don’t forget that the insurance provider will expect you to have been smoke-free for at least 12 months minimum – always check their individual terms and conditions as some insurers may expect a longer smoke-free duration before underwriting a policy.

Your age and medical history will also be taken into consideration – the younger and healthier you are when you take out your policy, the less you are likely to pay for your life insurance premium.