Life Insurance For Smokers: What You Need To Know

Life insurance is designed to provide financial protection for your loved ones after you die. But what happens if you're a smoker?

Smoking is known to increase the risk of developing health issues and dying at a younger age. As a result, smokers typically face higher life insurance rates than non-smokers. However, it is still possible for smokers to obtain life insurance, although they should expect to pay more for their policy.

Insurance companies have different ways of classifying smokers, and the definition of smoking may vary. Some companies consider cigarette smoking, while others include the use of cigars, e-cigarettes, vaping, chewing tobacco, and even nicotine replacement therapies as smoking. Marijuana use may also be considered, depending on the frequency and method of consumption.

When applying for life insurance, it is crucial to be truthful about your smoking habits. Lying on the application may result in denial of coverage or a higher rate if the insurer discovers your tobacco use.

The cost of life insurance for smokers can be two to four times higher than that of non-smokers, depending on factors such as age, gender, and coverage amount. Smokers may find term life insurance to be the most affordable option, as it provides coverage for a specific term and has lower rates than permanent policies.

If you're a smoker considering life insurance, it's essential to shop around and compare rates from different insurers. Additionally, if you're planning to quit smoking, you may want to choose a policy that offers the option to re-evaluate your rate after a period of abstinence.

Life insurance for smokers: types of policies available

Smokers can get life insurance, but they will likely pay higher premiums than non-smokers. This is because smoking is a proven health risk that reduces life expectancy, and insurers reserve higher rates for those not expected to live as long.

Term Life Insurance

Term life insurance is the simplest and cheapest kind of life insurance. It lasts for a specific number of years—usually 10, 20, or 30—and includes a death benefit paid out if the insured passes away during the policy's term. After the term is over, there is no other benefit or payback. This is generally the most affordable life insurance option for smokers.

Whole Life Insurance

Whole life insurance is a permanent policy that provides coverage for the insured's entire life. It typically includes a death benefit and a cash value component that allows the insured to earn money in a tax-deferred account. Whole life insurance is designed to guarantee a death benefit payout as long as premiums are paid and is, therefore, one of the more expensive types of life coverage.

Final Expense Insurance

Final expense insurance is a permanent policy designed to cover the expenses that arise in the final stage of life, including out-of-pocket medical bills, legal and accounting costs, and funeral and burial expenses.

Guaranteed-Issue Life Insurance

Guaranteed-issue life insurance is a unique type of permanent life insurance policy that does not require a medical exam or health screening. It is generally available to individuals between the ages of 50 and 80. While this option may appeal to smokers or those with existing health conditions, coverage limits are usually capped at around $25,000. Premiums are based on age, gender, and coverage amount rather than smoking behaviour.

How smoking impacts life insurance premiums

Smoking has a significant impact on the premiums of life insurance policies. Insurance companies consider smokers as high-risk individuals, so they are charged higher premiums. This is because smoking is a proven health risk that impacts life expectancy, a major cost factor when insurance companies set their rates.

When applying for life insurance, the application will typically ask if you smoke, and the insurance company will likely fact-check your answer by requiring a medical exam. This usually includes taking blood, saliva, or urine samples, which can indicate whether nicotine or cotinine (a byproduct of nicotine) is in your system. If you are found to be a smoker, you will likely be placed in a higher-risk category and be subject to higher premium rates.

The increase in premiums for smokers varies but is typically double or triple the rate of non-smokers. For example, a healthy 40-year-old male smoker of average weight and height would pay around $1,531 per year for a 20-year, $500,000 term life insurance policy, while a non-smoker would pay approximately $397 per year for the same coverage.

It is important to note that each life insurance company has its own method of classifying smokers, and the parameters can vary significantly. For instance, some companies may consider occasional cigar smokers as non-smokers, while others may not. Additionally, marijuana users may be considered smokers, depending on the frequency and method of consumption.

While it may be tempting to lie about your smoking habits on a life insurance application, it is crucial to be truthful. If the insurance company finds out that you lied, they may deny your application or claim request, leaving your beneficiaries without financial protection.

Quitting smoking can have a positive impact on your life insurance premiums. After staying off nicotine for a number of years, you can apply for a new policy as a non-smoker, which may result in lower premiums. However, it is important to remember that your age and other health concerns can also affect your premiums.

How life insurance companies classify smokers

Life insurance companies classify smokers in various ways, depending on the type of tobacco or nicotine product used, the frequency of use, and the time period since last use. Here is a detailed breakdown of how life insurance companies classify smokers:

• Cigarettes: Smoking cigarettes is almost always classified as a smoking risk by life insurance companies. Any tobacco use, including cigarettes, will typically be clear from blood, saliva, or urine tests during a medical exam.
• Vaping and e-cigarettes: Vaping devices and electronic cigarettes are generally treated the same as smoking cigarettes by life insurance companies. Even though there is no conclusive evidence that they are less harmful to your lungs, the potential risks associated with vaping are considered similar to those of smoking.
• Marijuana: Marijuana use is a grey area for life insurance companies, as it is legal in some states but not under federal law. Some companies may classify marijuana users as smokers, especially if the use is regular. If marijuana is used for medical purposes, insurers may focus on the underlying medical condition rather than the marijuana use itself.
• Cigars and pipes: Occasional cigar or pipe smoking may be classified as non-smoking by some insurers, as long as nicotine does not show up in medical exam results. However, if nicotine is detected, you will likely be classified as a smoker.
• Chewing tobacco: Similar to cigars and pipes, infrequent use of chewing tobacco may be classified as non-smoking, but regular use will likely result in a smoker classification.
• Nicotine replacement therapies: The use of nicotine patches, lozenges, gum, inhalers, or nose sprays may be viewed as less risky than smoking cigarettes by some life insurance companies. However, any nicotine use can still result in a smoker classification.
• Frequency of use: Insurance companies consider the frequency of tobacco or nicotine use when classifying smokers. For example, smoking cigars or using chewing tobacco once or twice a month may be considered non-smoking, while more frequent use of cigarettes or other tobacco products will likely result in a smoker classification.
• Time period: Some life insurance companies have specific time periods for classifying smokers. For example, if you have used nicotine or smoked cigarettes even once during the past 12 months, you may be considered a smoker.
• Medical conditions: If you have a medical condition related to smoking or tobacco use, this may also impact your classification. For example, if you have a medical marijuana card, insurers may focus more on the underlying health condition than the marijuana use itself.

It is important to note that each life insurance company may have its own criteria and parameters for classifying smokers, so it is advisable to shop around and understand their specific classification methods.

Applying for life insurance as a smoker

When applying for life insurance, you will typically be asked whether you are a smoker. Life insurance companies treat smokers as high-risk policyholders since they are more likely to develop health issues and pass away at a younger age. This means that you will likely have to pay higher premiums than a non-smoker.

The application process

During the application process, your potential insurer will probably review your existing medical records and history for clues to help them determine the risk. Your medical records are likely to contain information on your smoking history.

Your application will also likely be fact-checked by the insurer through a medical exam. Most (but not all) life insurance policies require you to complete this exam. During the medical exam, a sample of blood, saliva, or urine may be taken. When analyzed, it can indicate whether nicotine or cotinine, a metabolite of nicotine, is in your system. If this evidence is found, you will likely be classified by the company as a smoker.

Being honest

It's important to be honest on your application. If you lie about your smoking habits and your insurer discovers the misinformation, your application may be denied. An insurer could also withhold the death benefit from your beneficiaries if the lie is found upon your death.

Insurers have several ways to determine the validity of the information provided on your application. Aside from the medical exam, your insurer may also scrutinize your medical records, past life insurance applications, and even your social media feeds.

Cost implications

Smokers generally have higher life insurance rates than non-smokers. This is because life insurance is based in part on life expectancy and health status, and smokers are considered at higher risk of premature death. In other words, the insurance company determines that by insuring a smoker or someone with a smoking-related illness, it will likely have to pay out a death benefit to the beneficiary sooner than it would for a non-smoker.

Types of life insurance for smokers

The best life insurance for smokers will depend on their specific needs for the policy. Smokers may be eligible for many different life insurance policy types. Although you may pay more than a non-smoker would, you'll likely be able to find more than one company that will write you a policy. Here are some commonly offered policy types you may be eligible for:

• Term life insurance: The simplest and cheapest kind of life insurance, term life insurance lasts for a specific number of years — usually 10, 20 or 30 — and includes a death benefit paid out if you pass away during the policy’s term. After the term is over, there is no other benefit or payback. This is generally the most affordable life insurance for smokers.
• Whole life insurance: A whole life insurance policy is permanent coverage that will remain in force as long as you pay the premium. In addition, a portion of your premium will be put into a cash value component that you can draw from once a certain amount has accumulated. Whole life insurance is designed to guarantee a death benefit payout, as long as premiums are paid, so it's typically one of the more expensive types of life coverage.
• Guaranteed issue insurance: Guaranteed issue insurance is a unique type of permanent life insurance policy that does not require a medical exam or health screening. It is generally available to individuals between the ages of 50 and 80. If you are a smoker or have an existing health condition, this may appeal to you, though coverage limits are usually capped around $25,000. Your premiums will not be based on your smoking behavior but will instead take into account your age, gender, and the amount of coverage you would like. The caveat with this type of life insurance is that it can typically be more expensive than medically underwritten life insurance for a smoker in generally good health.

The cost of life insurance for smokers

Life insurance for smokers can be significantly more expensive than for non-smokers, with premiums often double or triple the standard rate. This is because smoking is considered a health risk that can reduce life expectancy, and insurers reserve higher rates for those not expected to live as long.

The average monthly cost of life insurance for smokers is $40.71, compared to $18.39 for non-smokers. This means smokers pay an additional $22.32 per month, or approximately 121% more than non-smokers.

The cheapest life insurance company for smokers overall is Allstate, with an average monthly cost of $26.57 for a 10-year term policy with $250,000 in coverage. For young adults and seniors, GEICO is the most affordable option, with average monthly costs of $21.14 and $389.08, respectively. Transamerica is the cheapest option for smokers seeking a high level of coverage, with an average monthly cost of $61.91 for a 10-year term policy with $1 million in coverage.

Life insurance companies classify applicants into two main groups: smokers and non-smokers. Smokers are usually assigned a lower health classification, resulting in higher premiums. Some companies have more specific classifications, such as Preferred Smoker, Smoker (Standard), and Table Rating.

When applying for life insurance, individuals will typically be asked about their tobacco use and may be required to undergo a medical exam, including blood and urine tests, to detect nicotine and cotinine in the system. Lying about tobacco use on a life insurance application is considered fraud and can result in the denial of coverage or benefits.

It is important to note that the cost of life insurance for smokers can vary depending on various factors, including age, gender, location, and the specific insurance company. Shopping around and comparing quotes from multiple insurers can help smokers find more competitive rates. Additionally, quitting smoking for at least a year may allow individuals to be reclassified as non-smokers and qualify for lower premiums.

Frequently asked questions