When a person applies for life insurance, there are a number of different components that will ultimately go into the amount of the policy’s premium.
Some of the primary drivers of premium price include the age and health condition of the applicant, as well as the amount of the death benefit that he or she is applying for.
In addition, the type of life insurance coverage will also make a difference. For example, those who apply for term life insurance will typically pay less for coverage than those who purchase permanent coverage because term life insurance is simply pure death benefit protection without any type of cash value build up or other “bells and whistles.”
Along with these items, though, one of the biggest criteria which goes into pricing a life insurance policy will be whether the applicant for coverage is a smoker or a non-smoker.
In fact, in some cases, this factor can oftentimes be one of the most essential aspects of pricing in the policy.
Quick Guide To Life Insurance for Smokers
- How Much Will Smoking Affect Life Insurance Rates?
- Why Does Smoking Have An Effect on Life Insurance?
- How Does The Insurance Company Know I Smoke?
- How Much Life Insurance Do I Need?
- How Can I Get Affordable Premiums?
- The Best Life Insurance Companies for Smokers
How Much Will Smoking Affect the Price of Life Insurance Coverage?
While many people realize smoking can raise the price of life insurance coverage, they may not know just how much.
Regardless of whether you are male or female, young or old, if you are a smoker, you can expect to pay much more for your life insurance coverage than someone who is a non-smoker.
In many cases, those who are in their twenties and thirties, the premiums for a smoker can be approximately double the amount of those of a non-smoker.
However, as one gets older – because of the more drastic effect on one’s life expectancy – life insurance rates can be between four and five times higher for smokers for those who are in their 50s and 60s. This is a considerable difference in price.
Why Smoking Has Such a Big Effect
Before accepting an applicant for coverage, a life insurance company wants to ensure it is taking on an acceptable risk.
This means the insurer does not want to have to pay out a costly claim soon after accepting the individual for coverage.
Because smoking causes health – and ultimately, life expectancy – issues, it has an effect on life insurance premiums.
Just some of the ways in which smoking can affect a person’s health include:
- Heart disease
- Cancer (primarily lung cancer)
- Other types of respiratory illnesses and complications
In addition, smoking has also been linked as being a contributing factor in osteoporosis, as well as certain types of complications during pregnancy in women.
With all of this in mind, as well as with the higher mortality rates that many of these conditions can carry, it is much easier to see why life insurance companies charge higher premium rates to smokers than to those who do not smoke.
Will the Insurance Company Know If You Smoke?
In some instances, applicants may wonder whether or not the insurance company will know whether or not they smoke.
This doesn’t just mean they want to know if you smoke cigarettes, this means any type of tobacco use, such as:
Life insurance policies that are traditionally underwritten will require an applicant submit a blood and urine sample.
These samples are analyzed by the insurance company – with one of the tests being for nicotine.
For those who do not answer truthfully on their application for coverage, not providing this information could end up hurting their survivors financially in the long run.
This is because if the insured dies within the first two years of owning the policy, the insurance company could opt not to pay out the death benefit.
This could be a devastating consequence to those who were counting on these funds – and well worth paying the extra amount of premium for being a smoker.
How Much Life Insurance Do You Need?
You need to decide how much life insurance you will need. Not having enough life insurance coverage is one of the worst mistakes you could ever make.
If your plan is too small, your family would be responsible for some leftover expenses they don’t have the money to cover.
There are several key categories you should account for to ensure you’ve got enough life insurance protection.
How Much Debt Do You Have?
The first number you should crunch is your debts and expenses passed on to your family members if something were to happen to you.
The first purpose of your life insurance policy is to give your family the money that they would need to pay off any debts you have.
If you didn’t have life insurance coverage, then your family would be left with a mountain of debt and no money to pay off those bills.
How Much Income Do You Bring In?
The next number you need to look at is your annual income. The secondary goal of your life insurance plan is to give your family the money they need to replace your income.
If you’re one of the main income earners in your home, they would struggle to pay for any necessary expenses without income.
Your life insurance plan needs to be large enough to replace your income and give your family the money they need to replace your paycheck every month.
Getting Lower Insurance Premiums
There are several ways you can get lower insurance rates, even as a smoker.
Making a few simple lifestyle changes could save you thousands of dollars every year on your insurance protection.
Just because you’re a smoker doesn’t mean your life insurance plan has to break your bank every month.
Do You Need To Get Back In Shape?
One way to save money is to improve your overall health. Before you apply for life insurance, the company is going to require that you take a medical exam.
The results of the medical exam are going to play a role in how much you pay every month for your insurance coverage. If you want to save money every month, you need the best medical exam results possible.
Do You Need To Be a Better Driver?
Another way you can save money is by slowing down on your way to work every morning. When you apply for life insurance coverage, the company is going to look at your DMV records.
If you have a driving accident on your records, then you then you’re going to be considered a high-risk applicant. That means you’re going to be facing much higher rates.
Additional Considerations For Smokers Applying for Life Insurance Coverage
No matter how much you smoke, let the insurance company know this when filling out the application for coverage.
This is because if you do not let the insurer know you are a smoker – and you, in fact, are – then you could it could be deemed as insurance fraud.
And, should this information be found out within the first two years your policy is in force, then it is possible the death benefits from your policy could be denied to your beneficiary should there be a claim.
If you are a smoker, however, and you do wish to bring down the amount of your life insurance premium cost; there are some things you can do.
- Stop smoking. Certainly, one way to bring down the cost of your policy is to stop smoking altogether. In most cases, you will have to have stopped smoking for a minimum of two years before the premium may be reduced. If this is the case, however, the reduction in your premium rate could be substantial.
- Stop chewing tobacco. You don’t just have to smoke cigarettes or cigars to be considered a smoker. So, if you chew tobacco, you should cease doing this, as well. If you do, though, the drop in your life insurance premium rates can also be quite significant. You could also consider switching your life insurance policy over to an insurance company that separates out the smoker’s rates by the different types of tobacco products, such as cigarettes, chewing tobacco, and e-cigs.
Many use medications or patches to help them stop smoking, you need to consider that these can also affect your life insurance rates.
Learn more about those medications here:
The Best Life Insurance Companies for Smokers
There are many great life insurance companies and products on the market today.
We have looked into your options as a smoker and narrowed it down for you to the life insurance companies that will look at you the most favorably as a current smoker:
Transamerica Life Insurance Company
Transamerica Life Insurance Company is one of the world’s leading insurance and financial services companies.
This company provides insurance and investments to over 19 million customers around the world.
The firm has been in the business of offering insurance and financial advice for more than 100 years.
New York Life Insurance Company
New York Life Insurance Company has been in business for more than 170 years.
The company has great ratings, and it offers many life insurance products – including term life, whole life, universal life, and variable life.
In addition, all of the industry-standard life insurance coverage options are provided, including a cash surrender option will return a policy holder’s balance following a cancellation, and a survivorship policy option will extend coverage to a second party.
There are other policy options as well, including one for a return of premium, as well as a term conversion option which allows the company’s term life insurance policyholders with additional flexibility as their policy ages.
Ohio National Life Assurance Corporation
Ohio National Life Assurance has been in business for over 100 years.
The company offers several different types of life insurance options, including term life, whole life, universal life, and variable universal life insurance.
As a leading provider of life insurance, the company is known for offering excellent policyholder value, as well as for its wide variety of products.
Pacific Life Insurance Company
Pacific Life Insurance Company has been in business for nearly 150 years.
The company offers a wide variety of different life insurance products, including term life insurance (Pacific PRIME Term), several versions of universal life (Versa Flex PRO ll, Pacific Estate Preserver lll, Versa Flex NLG, and Pacific Prime UL-NLG), and a number of Indexed Universal Life insurance products (Pacific Indexed Accumulator 4, Pacific Indexed Performer LT, Pacific Prime IUL, and Indexed Pacific Estate Preserver).