July 23, 2021

term policy is a life insurance plan that offers a considerably large cover at an affordable price. A life insurance plan is an essential investment, especially today when the future seems uncertain, and the inflation rate is continuously rising. Hence, it is high time you consider purchasing a term plan and securing your dependents’ future.

However, before buying such a plan, you must determine whether a specific policy is right for you. Here, we will help you understand how to opt for a term life insurance plan if you are a smoker.

Definition of a smoker according to insurance companies

Tobacco or nicotine is an intoxicating substance that is harmful to your health. If you consume it in forms such as cigarettes, beedi, cigars, khaini, pan masala, gutka, nicotine gum, or nicotine patch, insurers will consider you as a smoker. The insurance will ask you a few questions to ascertain if you belong to the smoker bracket. Some of these queries include:

  • Have you tried a tobacco item in the last four years?

  • Have you consumed a tobacco item anytime in the past?

  • Do you use tobacco or nicotine items currently?

If you answer ‘yes’ to any one of these questions, the insurance company will categorize you as a smoker. It is important to know that insurers will treat you as a smoker even if you smoke occasionally. The frequency is not a determining factor for them; if you have ever tried the substances at any point in life, they will charge you a higher premium. So, you can purchase a life insurance term plan at a reasonable premium only by completely avoiding smoking.

Why smokers have to pay a higher premium

When an insurance provider offers you a life policy, they take a risk on you. This is why every insurer wants to ensure that the policyholder is in good health, which increases the possibility of a longer life. However, if you are a smoker, you have a higher chance of developing lung and heart-related diseases. An ailment like cancer can significantly shorten your life. To tackle this risk, insurance companies require smokers to pay a higher premium compared to non-smokers.

The amount of extra charge varies among insurance providers. On average, the difference between premiums for smokers and non-smokers can be up to INR 2,000. However, this difference also depends on the health and age of the applicant.

Quitting smoking after buying the policy

You may wonder what happens if you purchase a life insurance term plan and then stop smoking. If you have not consumed any nicotine-based product for at least two years, you have the option to request a readjusted premium when renewing the insurance plan. However, the rule differs among insurers. You can contact your insurer and find out if they allow a premium-cut after an existing policyholder quits smoking.

Do not hide if you are a smoker

The nominees of a policyholder receive the sum assured only after making a successful death claim. If the insurer finds out that you lied in your application, they are within their rights to reject your nominees’ policy claim. To avoid this situation, be honest when applying for the policy. Hiding that you are a smoker will put your family at a high risk of not getting the sum assured.

These days, you can buy term insurance online in minutes without much effort. However, it is essential to be extremely careful while applying for the policy online. While filling the form on your insurer’s website, provide all the information accurately and truthfully.

Steve Campbell

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