It’s common knowledge that smoking isn’t healthy and it’s an expensive habit.  The life insurance industry shares this view.  Non-smoker rates and smoker rates are common terms in the industry.  The smoker rates are much higher than non-smoker.  The health risks of smoking are well documented and insurance companies are protecting themselves from this higher risk by raising rates for tobacco users.   However, just because you use tobacco does not mean you cannot get life insurance to protect your loved ones.

Who does the insurance industry consider a “smoker”?

There are different levels of tobacco use from the occasional cigar smoker to the daily cigarette user.

These products are considered by insurance carriers when you apply for life insurance:

Even though tobacco chewing/dipping and smoking cessation techniques and devices are not “smoked” some carriers still classify users as smokers.  Not all insurance carriers are alike though; carriers rate users differently.

The typical questions on an application asked about tobacco are:

  • Have you used a tobacco product in the last 12 months? (If you are a former user, but quit, you will need to provide how long ago you quit.)
  • What products do you use?
  • How often?

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Why can’t I just say I don’t use tobacco?

Some people think that the occasional cigarette on the weekends does not make them a “smoker.”  To the insurance industry, it does.  If you falsify your information and say you have never used tobacco, you will be failing to disclose a significant health condition and this is considered insurance fraud.  Tobacco usage can be determined from a simple urine test, which is a part of the life insurance medical exam, so don’t lie.

All life insurance policies carry a contestability clause (a two year time period) that allows the insurance company to challenge a death claim in the event of misrepresentation or fraud.  If you die within the first two years as a result of a car accident, for example, and it is discovered that you were a smoker but declared you weren’t on your application, insurance companies have the right to rescind the policy and deny any death benefit payout.  Be as accurate as you can on your life insurance application to ensure the entire coverage amount (the death benefit) goes to your loved ones.

What is the price difference between a smoker and non-smoker for life insurance?

The insurance price difference when comparing smoker rates to non-smoker rates is pretty significant.  For the average 40-year old male who does not smoke and is in good health, a 20-year $200,000 term life insurance policy is about $22 per month.  This same policy for a 40-year old male in good health but does smoke is about $54 per month.  While that is still a reasonable cost to protect your loved ones, it is more than double that of a non-smoker.

 Non-Smoker

 40-Year Old Healthy Male

 20-Year $200,000 Term Policy

 $22 per month

 Smoker

 40-Year Old Healthy Male

 20-Year $200,000 Term Policy

 $54 per month

Whether you smoke and how much you smoke puts you into a “risk class” that determines your premium amount.  Risk classes are determined during the underwriting process.   Underwriting is when the life insurance company assesses the risk of insuring you.

Risk classes for non-smokers applying for life insurance are typically:

  • Preferred Best: Applicants are in excellent health and do not participate in high-risk activities, and have a clean family medical history.
  • Preferred: Applicants are in very good health with a few minor health issues.
  • Standard: Applicants are in good health but have some issues whether they are health, lifestyle, or family history related.
  • Sub-Standard (normally categorized into “Table” classes): Applicants are in a state of health with one or more chronic illness or they regularly participate in high-risk activities.

Risk classes for smokers applying for life insurance are typically:

  • Preferred Smoker: Applicant uses tobacco products, but otherwise is in excellent health.
  • Standard Smoker: Applicant is in less than perfect health and regularly smokes or uses a tobacco product.

What if I start smoking after I have a policy inforce?

If you start smoking after you were approved for a non-smoker policy, you indeed were a non-smoker when you applied and cannot be charged with insurance fraud.  The insurance carrier cannot penalize you for starting up after being approved.  Even if you die of lung cancer caused by smoking, as long as you were a non-smoker when you were approved for your non-smoker policy, the insurance carrier still pays out the full death benefit.

What if I have a smoker policy and I quit smoking?

If you were approved for a smoker policy, but decided to quit later on you can go back and reapply for a non-smoker policy and your premiums would be adjusted accordingly for any payments moving forward.  However, if during the reapplying process it is determined that other health issues have arisen, they may deny you a reduction for your nonsmoking.

The length of time you have been a non-smoker to qualify for a non-smoker policy varies from carrier to carrier, but typically most require you to be smoke-free for 12 months before reapplying.  So, once you have been smoke-free for a year, notify your insurance company.  They may ask you to do another medical exam to ensure you are free of nicotine.

What if I smoke marijuana?

Many states in the U.S. have legalized marijuana for medicinal use, and some even for recreational.  This is causing changes in the life insurance industry.  Some insurance companies out-right deny coverage for any marijuana use because they view it as an illegal activity and a dangerous and high-risk habit, while others are more lenient.

As with tobacco use, it is very important to be descriptive about any marijuana use when applying for life insurance.  If you are using marijuana for certain serious medical conditions (e.g. cancer or glaucoma) the condition, not the marijuana use, is what the insurance carriers take into consideration when underwriting your case.  For people in generally good health but take medicinal marijuana for reasons like back pain or insomnia, a life insurance company may take the marijuana use into consideration when underwriting.  Typically the insurer will offer a smoker’s rate to these users, but some insurers will offer non-smoker.

Is it possible to get non-smoker rates if I use a tobacco product?

There are life insurance carriers that will give non-smoking rates to applicants who use tobacco or nicotine products other than cigarettes as long as certain standards are met.

Example:  Some carriers if they know you use a pipe or smoke cigars occasionally but your urine test is negative for cotinine you can qualify for non-smoker rates.
Example:  Some carriers will offer you non-smoker rates if you only smoke marijuana once a month.

These examples are reasons why it is extremely important to be descriptive about any tobacco or nicotine product use on your application so we can reach out to the appropriate insurance carriers.

Whether you use any tobacco or nicotine product, or smoke marijuana, we will work together with you to find the right insurance product at the best price for your individual situation.  Life insurance is purchased by smokers every day.  Instead of guessing at the cost, take a look for yourself by running free and anonymous term life insurance quotes today.

 

Photo credit to William Warby

 

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