Smoking Not Only Impacts Your Health but Your Wealth Too!

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In reality, the cost of smoking is much more than what you pay for a box of cigarettes. It adds as an expense to your life in other forms such as medical expenses, and even the premiums charged on your life insurance. The premium charged to a smoker is higher than what is charged to a non-smoker. The reason behind the death rate of smokers.

A term insurance policy acts as a financial safety net by providing coverage for the life of the policyholder for a definite rate of premium for a limited period of time. Term insurance has recently gained popularity due to the increase in awareness and affordable premium charges.

If the insured individual develops any addiction such as drinking or smoking after opting for the term plan, they are obliged to reveal any such information to the insurance provider.

The insurance providers classify smokers into three different categories, namely:

  • Typical Smoker – a smoker with an added small health matter
  • Preferred Smoker – an otherwise fit smoker
  • Table Rate Smoker – a smoker with a significant physical condition

How Does Smoking Impact a Term Insurance Policy?

When you are in the process of applying for a term insurance policy, the insurance provider will inquire about your usage of tobacco products in the duration of the last 12 months. These products include cigarettes, cigars as well as any kind of chewing tobacco. You are also required to mention the frequency of usage.

The insurance provider is entitled to know whether the applicant is a regular smoker or an occasional smoker. Otherwise, the company can charge you an increased premium or even terminate the policy. This is essential because the breach of a term plan can lead to a decline in the claim in case of any unfortunate situation.

What If The Policyholder Quits Smoking After Taking a Term Plan?

Even though insurance premiums can be significantly higher for smokers, there are available plans at reasonable prices. If the individual is in the process of quitting smoking, they can request the insurance provider to reconsider the policy’s position on an annual basis. The insurance provider may be able to reduce the premium charges depending on the time elapsed since the insured last smoked.

What Are The Consequences Of Hiding Information?

If the applicant provides information to the insurance provider that is incorrect in the fear of high premium charges, it may prove to be risky. While insurance providers ask the individual about their smoking history, they can even ask for a physical exam or a recent medical history. It may be an easy task to lie on paper, but it is very difficult to hide nicotine traces in a medical examination. The individual applying for a term plan must be completely transparent with the insurance company about their smoking history because the providers consider it a serious condition and they make sure to be completely thorough about it.

If a policyholder withholds information and the insurance provider later is made aware of it, the individual may face the following situations:

  • The policyholder can be charged with an insurance scam.
  • The insurance provider can consider the policy as invalid.

The insured is also denied the benefits offered by the policy, which can be a great threat in case of any unfortunate situation because the financial security of the individual’s family is on the line.

The Bottom Line

A term insurance policy is an essential part of your family’s future financial security and you should not let your smoking habit constrain you from opting for one.

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