The negative effects of tobacco are well documented. According to the Centers of Disease Control (CDC), cigarette smoking is the leading cause of preventable deaths in the U.S. Nearly one in five deaths each year is related to smoking.
In addition, according to the CDC:
Smoking causes about 90 percent of all lung cancer deaths and 80 percent of all deaths from chronic obstructive pulmonary disease (COPD). Smoking increases the risk of coronary heart disease and stroke by two to four times.
The above data helps explain why life insurance companies scrutinize the smoking habits of policy applicants.
Using tobacco, even if you’re a lifelong smoker, typically will not prevent you from obtaining life insurance. People become uninsurable only when they contract a disease, such as lung cancer, that threatens their longevity.
However, using tobacco increases your risk of premature death. All insurance is priced based on the policyholder’s risk of filing a claim. Therefore, being more likely to die because of tobacco use means you’ll pay far more for coverage than if you have never used tobacco products.
This is true even if your tobacco use is not traditional cigarettes. Most life insurance companies do not distinguish between cigarette smoking and vaping or smokeless tobacco. In all of these examples, applicants will receive the same premiums and health classifications. Marijuana use, even in states where it’s legal, can also increase your life insurance premium.
The cost of term life insurance, with all other underwriting factors being the same, can be more than three times as much for tobacco users as it is for those who don’t use tobacco.
State Farm’s online quote form provided a 40-year-old male in good health and a non-tobacco user a $750,000, 30-year term policy for $121 a month. The same candidate who used tobacco recently would be charged $385 a month.
For a 50-year-old female applying for a $750,000, 20-year term policy, the monthly premium quoted was $114 for non-smokers and $397 for tobacco users.
Learn More: How Much Does Life Insurance Cost?
Something you should never do under any circumstances is lie about your tobacco or e-cigarette use on the application.
The paramedical exam for underwriting includes the collection of blood and urine samples. Some even collect saliva via a mouth swab. Examiners will test these fluids for nicotine and cotinine, which take a while to leave your system. If you use tobacco, the exam will likely show it.
Many life insurers will instantly deny you coverage if your application answers regarding tobacco differ from your test results. This is out of concern that you may be lying about other aspects of your application.
If you are in fact being truthful about not using tobacco and the test results came back positive, you should ask for a retest.
Even if you manage to get covered despite lying about tobacco use, there’s a chance that a policy claim upon your death could be denied.
Life insurance policies typically have a contestability period. The provision gives the insurer the ability to investigate the insured’s death if it occurs within the first two years of the policy. If the insurance company finds deception on the application, it can potentially deny the death benefit claim.
If you die during this period and the insurer discovers you lied about tobacco use, they can legally deny paying the death benefit. Instead, they will return whatever premium you have paid. Your heirs can challenge the insurer’s ruling in court, but it will cost them legal fees and they may still lose the appeal.
The best way to minimize the effect of tobacco use and vaping on your premium is to buy a guaranteed issue life insurance policy. This is a type of life insurance that does not require underwriting or a medical exam. Applicants are automatically granted a policy; therefore, tobacco use is irrelevant. A couple of examples of guaranteed issue policies are:
- Group life insurance covers the lives of several individuals, usually based on employment with the same employer or on membership with the same organization. It is typically cheaper than an individual policy because the life insurance company is collecting premiums and spreading its risk among multiple people. Also, group policies are sometimes provided at no cost to the insureds by the plan sponsor, be it an employer or association.
- Final expense life insurance is a type of permanent life insurance designed to provide funeral expenses and any final medical bills. This is a permanent type of life insurance policy, so it does not expire as long as you pay the premium. Final expense insurance typically does not require full underwriting.
Keep in mind that guaranteed issue policies typically do not provide as much coverage or optional benefits as individually underwritten policies.
It’s also important not to confuse guaranteed issue with simplified issue life insurance. Even though it does not require a medical exam, simplified issue requires answering questions about medical history and tobacco use. Those questions must be answered honestly in order for the policy to be valid.
If guaranteed issue life insurance doesn’t meet your needs, you can still obtain an individual policy at a higher rate.
As with other situations, tobacco users should research multiple carriers to find the best coverage at the best price for their situation.
Some insurers may rate you better if you haven’t used tobacco for a certain amount of time. Therefore, if you can quit tobacco use, it may benefit you to wait a year or more to apply for life insurance.
Others will take into consideration other underwriting factors and minimize the impact of your tobacco use. There are also companies that haven’t different underwriting classes for tobacco users, such as preferred tobacco, which can save you on premium costs. Some insurers may also offer non-smoker premiums for vapers who use nicotine-free and cannabis-free products and people who smoke an occasional cigar.
Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.
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