Nine FAQs on life insurance and smoking

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You are at a party. As the evening unfolds you lit a cigarette. Your friends got surprised to see you smoking as they never saw you smoking before. You told them lately you have started smoking, but only occasionally as it keeps a check on your health as well as premium rates. Well, you might be right, but partly. Light smoking may be less harmful than chain-smoking but when it comes to insurance it might not make much difference. To help you understand here is a list of some of the frequently asked questions relating to insurance and smoking:

1) Who are considered smokers?

Most of the life insurers consider people using cigarettes, cigars and pipes, hookahs, nicotine substitutes, among others as tobacco users.

2) Does smoking affect premium rates?

Premium rates are higher for smokers compared to non-smokers for the same amount of sum assured. Consider this. The term insurance premium rates for a 30-year-old non-smoker for the cover of Rs 1 crore is Rs 11,595 while for smokers it jumps up by almost 100% to Rs 23457. The term of the policy is assumed here 30 years. Given the high difference in premium rates, people tend to give false health declarations at the time of buying the policy. But you should know that hiding material facts can lead to claim rejection at the time of filing claims.

3) How long do I need to quit tobacco to qualify as a non-smoker?

Again different companies have different waiting periods for you to be classified as a non-smoker. The period can be anywhere between 1 to 5 years, considering the ill effects of smoking lasts even after years of quitting smoking.

4) If a person is on Nicotine replacement therapy (NRT). Can he/she be considered a non -smoker?

Generally, insurers look for complete nicotine removal from the body for the person to be considered a non-smoker.

5) Do insurers differentiate between a light smoker and a regular smoker?

Different insurers have different rules for that. This benefit is not available on insurance products that have differential pricing basis smoker and non-smoker status.

6) Do I need to undergo a medical test?

The medical tests are conducted based on age and the sum assured on life. A non-smoker has to undergo a cotinine test to rule out nicotine usage.

7) What if one does not declare in the form?

At the time of claim, this can cause a problem as companies can reject the claim on the grounds of misrepresentation of facts.

8) Is e-cigarette considered smoking?

E-cigarettes control nicotine hence many insurers classify it as a smoker.

9) What are the rules for tobacco users?

There is generally no differentiation between light and heavy smokers. But if the person is unhealthy and sum insured is large then the insurers can ask for a higher premium.