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How Does Smoking Affect Your Term Insurance Premium?

  8/10/23 9:14 AM

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When it comes to buying term insurance, the phrase ‘health is wealth’ has a very literal connotation for smokers. Tobacco use is one of the greatest public health crises in the world. It is a well-known fact that smoking and the use of other tobacco products can cause a whole host of health problems including cancer and lung diseases. This is why life insurance providers categorise smokers under a high-risk profile, and so, smokers tend to pay more for term plans than non-smokers.

Even if two people are of the same age and want the same life cover amount, the smoker might end up having to play a higher premium. #DidYouKnow that the premium for a smoker’s life is approximately 40-75 per cent higher than the premium for a non-smoker? 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 thanks to hundreds of scientific studies conducted over the years. Long-term smoking can cause various illnesses, including cancer, heart disease, strokes, lung diseases, diabetes, etc. In addition to this, indulging in smoking can also amplify your risk of contracting tuberculosis, eye diseases, and may reduce the effectiveness of your natural immune system.

Can Smokers Buy Term Insurance?

Yes! A myth that smokers tend to harbour is that they will be denied the purchase of a term insurance plan. This is not true, smoking merely increasing your premium but does not deny you the right to buy a life insurance policy. A term plan can ensure the financial protection of your loved ones in your absence, making them an indispensable assent in the long-term. 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 smokers 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, and you have to choose one or the other.

Why Does Term Insurance Cost More for Smokers?

To understand why term plan for smokers tends to have higher premiums, it is important to understand 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.

It is important to be honest with your insurance provider as smoking is a serious clause that insurance companies follow sternly. An insurance company will have reasonable cause to deny your insurance claim if you lie about your smoking habits during the underwriting process.

Obscuring your smoking habits is never advisable, as ultimately, it is your family that will struggle if your life cover is denied. 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 the various aspects of different plans. Two critical factors to be considered prior to purchasing a term plan as a smoker are:

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 Term Insurance

Edelweiss Life- Zindagi Protect is a comprehensive term plan that not only secures the financial wellbeing of your loved ones but also provides return of premiums after term end. 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 Life Critical Illness Rider: provides a lump sum amount on diagnosis of a critical illness
  • Edelweiss Life Waiver of Premium Rider: waives off future premium payments on diagnosis of 35 listed terminal illnesses
  • Edelweiss Life Accidental Death Benefit Rider: provides additional financial assistance in case of accidents
  • Edelweiss Life Accidental Total and Permanent Disability Rider: compensates for immediate expenses arising out of permanent disability
  • Edelweiss Life Hospital Cash Benefit: pays for the daily allowance if you are hospitalised for any illness.

To conclude

The best way to save on your term insurance plans is by kicking the habit of smoking. Moreover, you should never be dishonest about your smoking habits while buying a term plan. Also, keep in mind that smoking does not bar you from buying a term plan, and you will eventually find the right plan that meets all your needs while securing your loved ones.


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.

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