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The Cost of Smoking on Life Insurance

Last modified: 6 Jun 2013

There are numerous factors that can affect the life insurance premiums quoted by providers and smoking is most definitely one of them. Any lifestyle choice that has the potential to lead to a premature death significantly increases the premiums quoted by most insurance providers, even if the lifestyle choice in question i.e. smoking, is rarely indulged in.

Why smoking affects the cost of life insurance

We all know that smoking is closely linked to medical conditions such as cancer, emphysema, bronchitis and asthma. Any one of these conditions has the potential to kill you at a younger age than if you had never smoked and because of this, insurance providers determine you to be high risk in terms of having to pay out on your policy. In fact, any lifestyle choice or factor e.g. excessive alcohol consumption, obesity etc. that is seen to increase the risk of you dying while insured will push up the cost of your life insurance premiums.

The dilemma of occasional smokers

Over the last few years the line between what constitutes a smoker and a non-smoker has become blurred as more and more life insurance applicants challenge the definition given by the insurance companies.

As things stand most insurance companies consider you to be a smoker if you have had any form of cigarette, cigar or pipe at any time during the previous 12 months. It doesn’t matter if you have the occasional cigar when celebrating news or the odd cigarette when out with friends – this still classes you as a smoker. Similarly you can have given up smoking 10 months ago but you’ll still be classed as a smoker.

Obviously this degree of smoking isn’t going to affect your health in the same way smoking 20 cigarettes a day will, and this is the argument that occasional smokers are making at the minute.

Should you fail to declare the odd cigarette?

A lot of people do decide not to declare the fact that they have a cigar at Christmas or a few cigarettes every few months when they fill in their life insurance application form. After all, how are the insurance companies going to know? Today though, a growing number of insurance providers are turning to medical tests to determine whether you are an occasional smoker or not.

The medical tests in question happen mainly at your post mortem although they can be conducted while you are still alive! So, should you die prematurely and while insured your insurance provider has the right to test specimens of your hair (and bone if done at post mortem) to determine when you last had a cigarette, or a cigar. Strangely the tests don’t measure the levels of nicotine in your body because nicotine is very quickly broken down. Instead they measure the levels of the metabolite cotinine which remains in the body for several years in some instances.

If cotinine is detected within your hair or bone at levels that exceed those related to passive smoking you will be classed as a smoker. Unfortunately if you declared yourself a non-smoker on your life insurance form then your insurance provider can refuse to pay out on your policy. Obviously this would be devastating for the family you leave behind so it pays not to lie on your application form.

How life insurance providers categorise smokers

The vast majority of life insurance providers place applicant into one of three defined categories with relation to smoking. The categories used by most companies are as follows:

If you are a smoker or you have been a non-smoker for less than 12 months you’ll fall into the Standard category. It is this category that elicits the highest life insurance premiums. If or when you have been a non-smoker for between three and five years you move to the Preferred category and your premiums may decrease as a result. Over 5 years of being smoke free classes you as a Preferred Plus customer and again your life insurance premiums will be reassessed and possibly reduced.

Understandably your life insurance provider will look at several other aspects of your lifestyle before reducing your monthly premiums though as smoking is only one aspect that determines cost. So for example, if you become excessively overweight through giving up smoking then this will negate any savings you may make by being a non-smoker. The healthier you can make your lifestyle in general the lower your life insurance premiums will be.

Overcoming the problem of occasional smoking

Because of the ongoing controversy regarding occasional smoking a small number of life insurance providers are now starting to change what they determine to be an occasional smoker. Some are now starting to ask whether you have smoked within the last 12 months and if so the average number of cigarettes/cigars you have smoked per day. If your average is determined to be lower than the maximum number specified then you’ll be classed as a non-smoker rather than a smoker.

At the present time the majority of life insurance providers that have changed their classification criteria state that one cigarette/cigar per month or a maximum of 12 per year is the cut-off point for being a non-smoker although this isn’t always the case. Before taking out a policy therefore it pays to find out exactly how each insurance provider differentiates between a smoker and a non-smoker so you don’t get caught out in the future.

In conclusion

It’s no secret that smoking increases the probability of premature death and this in turn increases the cost of your life insurance premiums. Even if you only smoke a few cigarettes a year you will still be classed as a smoker by most insurance providers and you will be given higher quotes than non-smokers. Thankfully some companies are starting to change their way of thinking though and it pays to research the market to locate such companies. Make sure you look closely at any other terms and conditions of your policy before you buy or get an independent advisor to do this for you.



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