Life insurance companies will generally place you in a risk category to determine how much you should pay for your premium. The categories are determined by your overall health and your lifestyle, including whether or not you smoke. Some companies use a "Super Preferred" or "Preferred Plus" class for the very healthy, and others have a "Substandard" or "Rated" class as well.
As an applicant for life insurance, you'll be placed in a risk category, such as "Preferred" or "Standard," along with a subcategory of "No Nicotine" that indicates whether or not you have smoked or use nicotine.
Rates for "Preferred, No Nicotine" will be lower than "Preferred, Nicotine" despite the current health of the applicant, because of the higher long-term risk of illness or death due to smoking-related diseases.
Are you considered a smoker?
The questions about smoking and tobacco use are very specific when you apply for life insurance. A typical application will ask, "Have you used a tobacco product in the last twelve months?" You'll need to explain whether you use cigarettes, cigars or even chewing tobacco. Most importantly, you must state how often you use each tobacco product.
Whether you smoke several cigarettes a day or half a pack, you are a smoker and should answer the questions completely and honestly. But, here's the thing. If you only have a cigarette once a month when you're having a beer, you're still considered a smoker by most life insurers. The health risks are basically the same for occasional smokers – and the rates are often the same as well. However, cigar smokers who light up 3 or 4 times a year often get a break and are classified as non-smokers. From a life insurance standpoint, the celebratory cigar does not make you a "smoker" in the true sense of the word.
To tell the truth
During the life insurance application and underwriting process, you may be required to get a medical examination to verify your health. Depending on the company and the type of insurance you purchase, the exam may include blood and urine tests as well as a full check-up.
Can a smoker "cheat" the system? Your body generally rids itself of nicotine within 72 hours. So, if the blood test and urine sample are given 72 hours after you last smoked, the nicotine level may be low enough to escape detection, but know that companies are looking for a negative reading for nicotine – not just a low level. If you've submitted your application as a non-smoker and have a positive result for nicotine, your company can raise the rate or choose not to issue a policy.
What happens if you are caught?
If you're a smoker and you don't tell the truth on an application, you can be charged with insurance fraud. In addition, if your insurer makes the discovery while investigating a claim that's made after your death, they could contest the validity of your policy contract – and deny the claim for benefits based on your misrepresentation of the facts. If they discover your lie during the 2 year contestability period, they might choose to cancel the policy, if they don't offer policies to smokers.
What if you start smoking again after the policy is issued?
It is important to be truthful when filling out your life insurance policy, but if you start smoking after it's issued, you are not required to tell your insurance company. If you die, and your life insurance premium was based on the nonsmoker rate, and you later began smoking, your death benefit will not be jeopardized. However, it's important to note again that if your cause of death is found to be a smoking-related illness, your beneficiary could have problems when making a claim.
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Originally posted September 21, 2004.
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