Smoking is not only injurious to your health but it can cause a huge dent in your pocket. If you are a compulsive smoker then apart from losing money on cigarettes, you will end up spending a substantial amount towards medical expenses in the long-term. You might think that you can always buy life insurance in order to cover your medical bills in case of an emergency. However, you need to understand that due to the risks associated with smoking, insurance companies charge a higher premium from smokers as compared to those who do not smoke. Hence, if you are planning to buy online term insurance, you need to be prepared to pay a higher premium amount.
How do life insurers define smokers?
When it comes to a life insurance policy, whether you smoke one cigarette a day or five cigarettes a day, you will be considered as a smoker. There is no differentiation between an occasional smoker and a regular smoker for an insurance company.
Also Read: How to Buy Term Life Insurance Online
Why do insurers charge high premium from smokers than non-smokers?
There is an obvious reason why insurance companies charge a higher premium from smokers as compared to non-smokers. Companies segregate the policyholders into various categories or risk profiles based on factors like their health, history of medical illness, lifestyle, and age. The risk profile may vary from an average risk to a preferred category and a non-preferred risk category. This totally depends on the factors mentioned here.
An insurance company will consider all the factors when estimating the risk associated with an individual. The company will categorize you in a specific risk profile and your premium will be based on the same. With regard to smokers, irrespective of the number of cigarettes you smoke, you will fall into the high-risk category and this will automatically lead you to pay a higher life insurance rates for smokers. If you are a smoker, you need to be very clear about it right from the start. When you purchase an insurance policy, you need to inform the insurance company about your smoking habit. If you hide this fact and continue smoking after purchasing the policy, there are chances that your claim will be rejected at a later stage. You can easily avoid problems in the future by disclosing your smoking habits right from the start.
Life insurance premiums are indeed more costly for smokers than for non-smokers. If you are in the process of giving up smoking, you can ask your insurance company to reassess the policy after a year from stopping the habit. The company might be able to decrease the amount of premium depending on the amount of time passed since you smoked your last cigarette.
Smoking can harm your health, change your lifestyle, and burn a hole in your pocket. The best thing to do is to stop smoking completely and if you are a smoker, you need to be honest about the same with your insurance provider. Buying the policy will become easier when you declare the fact. Lastly, if you have been a non-smoker or have stayed away from tobacco for a long period of time, you have nothing to worry about your claim being rejected.