Aside from its figurative meaning, the phrase ‘health is wealth’ has a very literal connotation for smokers, especially when it comes to buying term insurance. With the tobacco epidemic posing as the biggest public health risk globally, insurance providers categorise smokers under a high-risk profile, and so, the term plan for a smoker comes at a higher cost.
While undertaking a cost analysis, if you compare term insurance plans for a smoker and a non-smoker, the former will have to pay a higher premium for the same term plan. However, with the purchase of an online term insurance plan, this cost can be reduced to a certain degree.
Let us understand how smoking affects term insurance premiums and get some insight into term plan for smokers.
Health Risks for Smokers
The long-term effects of smoking are well known as they have been explained to us time and again through various media. However, there is little impact of this information as the health risks are not properly analysed. Smoking can be the cause of severe lifestyle illnesses, including cancer, heart disease, stroke, lung diseases, diabetes, etc. In addition to this, indulging in smoking also amplifies your risk of contracting tuberculosis, eye diseases, and problems with the immune system.
A myth that smokers tend to harbour is that they will be denied the purchase of a term insurance cover. Contrarily, there is a term plan for smokers that can ensure the financial protection of their loved ones in their absence. While smoking does not prevent you from getting a term plan, when you compare term insurance plans, you can easily conclude that it would be highly beneficial to kick the habit for good.
How Do Insurance Companies Define Smoking?
As the health consequences of smoking have been long established, the premium cost for a smoker even when they buy an online term insurance plan is higher. However, it is important to understand the classification of smokers by insurance companies. Generally, insurance providers don’t distinguish between the forms of nicotine consumption. Even if e-cigarettes or vaping are considered healthier alternatives to regular cigarette smoking, insurance providers make no distinction between the two.
Moreover, no category distinguishes based on the frequency of your smoking habit or of how many cigarettes you smoke in a day. There is usually only a ‘yes’ or ‘no’ option that the insurance-seeker has to choose from.
Why Does Term Insurance Cost More for Smokers?
To understand why term plan for smokers tends to be on the higher side, it is important to acquaint yourself with the basics of term insurance. When you buy a term plan, it is to ensure the financial security of your loved ones in your absence. The price of this cost of security is determined by examining the health, family history, and age of the policyholder. One of the crucial determinants of health is whether or not the insurance-seeker is a smoker.
The process of underwriting calculates the health risk and determines the coverage you are eligible for. As being a smoker increases your susceptibility to lifestyle diseases, this automatically results in a higher premium amount.
Importance of Transparency in Disclosing Your Habit
As the cost of insurance tends to be higher for smokers, insurance-seekers might think that lying can be an easy way out. However, although it is easy to lie verbally, it is practically impossible to cover the nicotine traces during a medical test, even if you might be an occasional smoker.
To ensure adequate cover, it is imperative to be honest with your insurance provider as smoking is a serious clause that insurance companies follow sternly. If the insurance company believes that the cause of your health deterioration is because of smoking, after you falsify the information, they can ask for a medical examination which could result in dire consequences.
Lying about smoking is seen as insurance fraud, and it can threaten your claim settlement leaving your family in an uncertain financial situation. To prevent this from happening, it is important to be transparent with your smoking habits regardless of whether you are a regular or occasional smoker.
What Should Be Checked Before Buying Term Insurance?
Seeking an online term insurance plan makes it easier to compare term insurance plans. However, regardless of whether you are looking for an in-person or online term plan, two critical factors need to be considered prior to purchase if you are a smoker and are seeking term insurance:
· Claim Settlement Ratio: The term plan claim settlement ratio refers to the number of claims that the insurance company settled during a financial year. This includes fresh claims as well as the claims that were pending from the previous year. The term plan claim settlement ratio is an important parameter as it reflects the reliability of the insurance company.
· Term Insurance Riders: Riders are add-ons that strengthen a term plan, and they come at an additional premium cost. As smokers are more vulnerable to lifestyle ailments, term insurance riders can be particularly beneficial for them. The critical illness rider is highly recommended for smokers. Under this rider, if the policyholder is diagnosed with any of the listed critical illnesses, a lump sum amount is provided to deal with the hospitalisation expenses.
Optimum protection with Edelweiss Tokio Term Insurance
The Edelweiss Tokio Zindagi Plus term plan is an innovative offering that not only secures the financial wellbeing of your loved ones but works progressively towards wealth creation to ensure your happily ever after. Understanding that consumers today are pressed for time, Edelweiss Tokio enables you to buy an online term plan and provides you with the option to strengthen your policy with the choice of four riders:
· Edelweiss Tokio Life Critical Illness Rider: provides a lump sum amount on diagnosis of a critical illness
· Edelweiss Tokio Life Waiver of Premium Rider: waives off future premium payments on diagnosis of 35 listed terminal illnesses
· Edelweiss Tokio Life Accidental Death Benefit Rider: provides additional financial assistance in case of accidents
· Edelweiss Tokio Life Accidental Total and Permanent Disability Rider: compensates for immediate expenses arising out of permanent disability
· Edelweiss Tokio Life Hospital Cash Benefit: pays for the daily allowance if you are hospitalised for any illness.
The best way to save on your term insurance plans is by kicking the habit of smoking. However, while doing so, it is important to be patient with yourself. Meanwhile, secure the financial future of your family through term insurance.
Aastha Mestry - Portfolio Manager
An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.