Obtaining Life Insurance as a Smoker

Many smokers have the mistaken belief that they can’t carry life insurance because no company would approve their application. While smokers can expect to pay more for a life insurance policy, not every company will deny an application outright. From the insurance company’s perspective, smoking is a lifestyle choice and is no different from someone who overeats or drinks alcohol to excess. Each carries unique health risks that the life insurance company rates accordingly.

How Smoking Can Affect Life Insurance Premiums

Depending on the company providing coverage, smokers may pay up to four times more for the same life insurance benefits as someone who does not smoke. However, it’s important to keep in mind that smoking alone does not determine the premium rates for applicants who are approved. The life insurance underwriter also considers age, weight, whether the applicant is generally in good health, family health history, and other factors.
Another thing that surprises smokers is that some life insurance companies determine rates based on how much and how often the applicant uses tobacco products. Those who are only occasional smokers could end up paying significantly less for their life insurance policy.

Underwriting Criteria for Smokers

Life insurance companies ask questions on the initial application to determine if someone is a smoker. These typically include:

  • Has the applicant used any type of tobacco product even one time in the past year?
  • Is the applicant currently (or at any point in the past 12 months) using nicotine gum, a patch, or another smoking cessation product?

By asking these questions, the underwriter is trying to determine whether the applicant regularly uses any form of tobacco or has used it in the recent past. After reviewing the entire application, the underwriter assesses the risk to the company to provide life insurance to the applicant.

Life Insurance Classifications for Smokers

There are six different classifications used by life insurance companies to rate applicants and determine their premiums, but only Preferred Smoker and Standard Smoker are used for those who smoke. A person in the first category would normally qualify for coverage under the regular preferred category if he or she didn’t smoke. People assigned the Standard Smoker classification are those who may have minor health issues unrelated to their smoking. For either category, the insurer may choose to move the applicant to a comparable classification for non-smokers if he or she is not a heavy tobacco user.

The Medical Examination For Smokers

Before the life insurance provider approves an applicant for coverage, he or she must submit to a medical examination. This typically involves the following:

  • Verifying the height and weight listed by the applicant.
  • Blood pressure check.
  • Investigation of pre-existing conditions and any genetic pre-disposition the applicant may have to a serious health condition.
  • A test that measures if cotidine is present in the urine or saliva of the applicant. This is found in several nicotine products. If the applicant didn’t disclose nicotine use and it is discovered during the medical exam, the life insurance company will most likely discontinue the underwriting process and deny coverage.
    • Consequences of Committing Fraud on a Life Insurance Application

      If an applicant states that he or she is a non-smoker on the life insurance application and somehow passes the medical exam, there is still the risk of the company discovering the truth later. It is standard practice for life insurance providers to investigate the medical records, recent health information, and the circumstances of a policyholder’s death for every claim it receives. Should the insurer discover that the applicant provided false information regarding smoking, the family of the deceased would not receive any benefits. The only thing they would be entitled to at this point is a refund of the policyholder’s premiums.

      Which Types of Tobacco Products Does an Applicant Need to Use for a Life Insurance Company to Classify Him or Her as a Smoker?

      Most life insurance providers classify someone as a smoker if he or she has smoked cigarettes or cigars at any point during the past year. Chewing tobacco and dipping, which technically do not involve the act of smoking, are nonetheless included when determining whether the applicant is a smoker.

      Tips for Smokers Purchasing Life Insurance

      Smokers shouldn’t assume that they must accept coverage from a life insurance company just because their application was approved. For something as important as life insurance, it’s important to compare rates and benefits as well as negotiate whenever possible to get the best possible coverage. The following tips may also prove useful:

      • People interested in life insurance should buy it as early in life as possible. Smokers in their 20s and 30s have the best chance of finding affordable rates, especially if they don’t have any other lifestyle factors insurers consider risky and are in good health.
      • Researching various policies, such as term and whole life, can help people avoid underinsuring their beneficiaries or buying more insurance than they need.
      • Life insurance companies typically charge premiums based on the range of coverage provided to the applicant. For example, a person would pay more for $250,000 to $300,000 worth of benefits than they would for a $249,000 payout . It therefore makes good financial sense for applicants to consider what their family would actually need to survive after their death since it could cost significantly less to drop to a lower coverage category.
      • All people who hold a life insurance policy should review it at least once every three years to see if lower rates are available. This is especially important when life circumstances change, such as the policyholder quitting smoking. Most life insurance companies allow former smokers to switch to the non-smoker rate if they can prove they have been completely tobacco-free for a specific amount of time.