Smoking and Life Insurance: What You Need to Know

 

Have you ever wondered why there’s a vast difference in price when it comes to getting life insurance for smokers compared to non-smokers?

You might think that smoking a few cigarettes a day shouldn’t have that much of an impact on your life insurance rates, but insurers weigh a lot of factors when it comes to accepting applicants and determining their risk class.

If you recently quit smoking, or if you want to learn how to improve your chances of getting a better rate for life insurance, here’s what you need to know about how life insurance companies evaluate smokers.

Increasing chances of being ‘high-risk’

Insurance companies have a rating system to determine how much to charge an individual for their life insurance policy. Applicants in excellent health tend to qualify for the top two rate classes – preferred and preferred best – while people with severe health issues typically qualify for a ‘substandard’ rating. The lower your rate class, the more expensive your life insurance will be.

It shouldn’t come as a surprise to anyone that smoking has a negative impact on your health. Unfortunately for smokers, most of the dangers of smoking, such as lung cancer, hypertension, stroke, and heart disease are some of the most common health issues that insurance companies typically decline applicants for.

While this might seem unfair to cigarette smokers, the numbers don’t lie, and numerous studies have linked higher than average mortality rates to smoking. As a result, this seemingly innocent habit is a huge variable that insurers consider when assessing their rates for cigarette smokers.

How much more am I paying?

Smokers generally pay about three times more than non-smokers in the same risk class. There’s a significant reason why the charge is so high for smokers; life insurance companies rely on mortality statistics to determine how much they need to charge their clients, and to put simply, cigarette smokers tend to live shorter lives than non-smokers.

A non-smoker’s monthly $50 per month premium could blow up to be something close to $150 for smokers. Insurance companies are a business, and having a lot of clients that smoke is just as much a risk to them as a cigarette is a risk to your health.

What can I do about it?

The most obvious choice is to quit smoking as soon as possible. After twelve months, the life insurance companies will consider you a non-smoker and your rates will be cut in half. A few companies also offer non-smoker rates to people who use e-cigarettes, nicotine gum, cigars, chewing tobacco, or a pipe.

If quitting is not an option, and you’re not willing to try an e-cigarette instead, your only option is to look for an insurance company that caters to smokers. While you’ll still end up paying more than a non-smoker, an experienced independent agent can help you find the lowest rate available by shopping the market and comparing your options.

Author: Cliff Pendell