Why Higher Premiums Must Not Stop Smokers from Purchasing Term Insurance?


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None of us are strangers to the hazards of smoking. Tobacco use can have a negative impact on both your health and your finances. Most importantly, it can also impact your financial planning. If you intend to secure your family’s future with a term plan, you may be aware that the insurance premium is also affected by smoking. We will discuss Term Insurance in this article.

Insurance providers levy higher insurance premiums for individuals with smoking habits than for non- smoker’s. This is due to the harmful effects of tobacco use on one’s health. Essentially, insurance providers offer protection against life’s uncertainties and hence, they assess a person’s risk profile at the time of purchase.

Insurers in India consider the dangers of smoking, which results in a much higher premium cost for a smoker than a non-smoker. If you want to save money on life insurance, quitting smoking is one of the most efficient methods.

Let’s understand in detail how smoking can affect your term plan premium and what you should do in such a scenario!

How Can Smoking Affect Your Term Insurance Premium?

To begin, let’s go through the fundamentals of life insurance. You purchase a policy to ensure financial security and protection after your death. So, how do insurance companies determine how much that security is worth? Your current health and family history heavily influence the cost of life insurance. But, when it comes to determining your health risk, what is one of the most important criteria insurance companies consider? Whether you’re a smoker or not.

When determining the premium rates for tobacco users, many insurers consider the higher risks linked with smoking. This is due to the well-known health concerns of smoking and the threats it poses to your life. It can lead to severe medical problems at a young age which a non-smoker has lower chances of facing. Therefore, the insurance underwriting process for people who smoke can be slightly different

Who Is a Smoker, And How Do Insurance Classify Smokers?

It is critical, to be honest with all of your answers while filling out an application for a term plan. Life insurance companies have a variety of methods for verifying the information you provide on your application. The questions revolve around which product a person uses and how often they use it.

Here are the situations under which you will be classified as a smoker when buying a term plan:

  • If you answer “Yes” to the question about smoking on your application, a life insurance company will consider you a smoker.
  • Anyone who uses tobacco or nicotine in any form, such as cigarettes, beedis, cigars, pan masala, or khaini, is regarded as a smoker for insurance purposes.
  • You can be classified as a smoker even if you use a nicotine patch or gum. Most life insurance firms will run a background check to see if you have ever used nicotine.
  • Whether you have consumed nicotine products regularly (within a specific time range) or occasionally smoke a few cigarettes, your answer on the form should be “Yes,” as this still puts you in the smoker category according to insurance regulations.
Term Insurance
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  • Suppose a person develops a smoking habit after buying a term plan. In that case, it is critical to notify the insurer to enjoy the benefits of the term plan without any hindrances in the future. Otherwise, delaying the information could result in a policy cancellation.

Should Smokers Pay High Premium and Buy a Term Plan?

Even though paying a higher premium does not sound like an ideal option to anyone, it is not without reason. Smokers are at greater risk for health problems and may need intensive medical care in the future in case of a health emergency. This would lead to hefty medical bills, and without the best term plan in India, your family may face significant financial stress coping with it.

Closing Notes: Term Insurance

You must remember that the purpose of buying the best term plan in India with comprehensive coverage and riders is to ensure your family remains financially stable under unforeseen circumstances. Hence, it is critical to be honest about your lifestyle to get the right coverage for your loved ones. Even if you have quit smoking, it is good to make that disclosure to the insurer since honest declarations will allow for a more efficient claim settlement in the future.

Before signing up for a term plan, make sure you read through all the details carefully.

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Raushan Kumar
A Cook, Software analyst & Blogger.


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