How does smoking impact your term insurance premium?

 How does smoking impact your term insurance premium?

A tiny cigarette might not cost you a lot but can have a much larger impact on your life. While you might find it easy to shell out money out of your pocket for a cigarette, you might struggle to manage your medical expenses due to the hazardous effects of smoking on your health. Treating ailments, such as cancer caused by rigorous smoking, can take a toll on your finances.

Many of you might rely on your term life insurance policies since it is a protection plan that can offer financial aid to your family members. Although it can protect your family under every circumstance, the term insurance premium can be relatively high for smokers. Since you are at a greater risk of dying due to smoking, your insurance company can charge you more than non-smokers. Ideally, your smoking habits and the term insurance premium can be co-related to one another. Therefore, let’s understand the impact of smoking on term insurance plans:

Term insurance can offer financial coverage to your family members in case anything happens to you due to your smoking habits. As a policyholder, you should regularly pay the premium in return for the term coverage provided to your family. If you are a smoker, you might have to pay a relatively high premium as compared to other people.

Smoking can be counted as a part of your lifestyle habit. If you are addicted to smoking, you should disclose the information to your insurer compulsorily. Based on your smoking habits, your insurer can categorise you under the following:

  1. Preferred Smoker

A preferred smoker can be the one who smokes occasionally and has a fitter physical health.

  1. Typical Smoker

A typical smoker can be the one with a supplementary minimal health condition.

  1. Table Rated Smoker

A table-rated smoker can be the one with a significant health concern.

Typically, the term insurance premium can depend on the smoking category. For instance, if your insurer identifies you as a preferred smoker, you might have to pay a relatively low premium amount as compared to a typical or a table-rated smoker. In simple terms, the lower the health risk, the lower the premium and vice versa.

While buy term insurance, your insurer might inquire about the amount of tobacco that you consume. Under tobacco, your insurance company may count cigars, cigarettes, or chewing tobacco. Additionally, you might have to specify the frequency of usage to your insurance provider.

Due to the fear of high premiums, many of you might either choose to provide incorrect information or hide your smoking habits from your insurer. Since a lot of insurance companies might request for medical examinations before availing term coverage, you should disclose all the details about your medical history, current lifestyle habits, and so forth. If your insurer finds out about any of your hidden habits, your insurer can decline the claims.

On the other hand, if you are in the process of quitting smoking or you have already given up on your smoking addiction after purchasing the term policy, you should mention it to your insurer. Under such a scenario, your insurance provider might reduce your overall premium value based on the time you have stopped smoking.

As highlighted above, smoking can have a significant impact on your health as well as term insurance premium. Irrespective of the high premium value, purchase a term policy for the safety of your loved ones in your absence. Don’t compromise the security of your loved ones even if you have to pay a relatively high cost. If you are worried about paying extra, use a term insurance calculator to get the estimate of the premium amount before you buy term insurance online.

Elyse Sanford