How Tobacco is Affecting Your Life Insurance Premium
Jun 1st, 2008 by Kaushik Adhikary
Image via WikipediaMay 31st is observed as NO TOBACCO DAY. I remember this day forever as last year on this very day I had quit cigarettes. Probably everybody knows that tobacco is the fourth most common risk factor for disease worldwide. The economic costs of using of tobacco are equally devastating.
Tobacco not only accelerates high public health spending of treating tobacco-caused diseases, it also reduces productivity among workers. A 1994 report estimated that the use of tobacco resulted in an annual global net loss of US$ 200 thousand million, a third of this loss being in developing countries.
Tobacco causes 1 in 10 deaths among adults worldwide. In 2005, tobacco caused 5.4 million deaths, or an average of one death every 6 seconds. At the current rate, the death toll is projected to reach more than 8 million annually by 2030 and a total of up to one billion deaths in the 21st century.
Most alarming thing is that almost half of the world’s children breathe air polluted by tobacco smoke, which worsens their asthma conditions and causes dangerous diseases. This fact file explains why ensuring a smoke-free environment is the only way to protect ourselves from the lethal ill effects of tobacco smoke.
That’s why life insurers are extra cautious in accepting tobacco users. Science has shown that people who smoke generally pass away at a younger age. While evaluating how much of a risk you are to insure, the life insurance company takes into account the negative impact of smoking that has on your life expectancy.
Because of higher risk to insure, the life insurance company charges you more for your life insurance policy knowing the fact that smokers are more likely to die sooner than someone who doesn’t smoke. It is not unusual that employees who smoke tend to file more claims, and over time this drives up the premiums the employers has to pay; on top of that non-smoking employees file fewer claims and therefore get reduced premiums.
Tobacco use can be accurately determined through medical exam such as urine specimen test. Cigarette smokers generally pay higher premium than non-smokers. But occasional smokers sometimes relax to obtain “non-smoker” rates. Other tobacco or nicotine users are also sometimes looked at more favorably than heavy or moderate cigarette smokers.
Life insurance companies consider pipe, cigar, chewing tobacco, dip, snuff, nicotine patches and nicotine gum as “other tobacco”. If you use tobacco only in this way, you have a good chance to markedly reduce your smoker life insurance rates.
If you are a smoker, finding lower life insurance premiums can be very difficult. Smokers generally pay higher rates than non-smokers just because of the increased risk of cancer, heart disease, and cardiovascular disease.
However, finding affordable life insurance for smokers is possible. While some life insurance companies have very competitive non-smoker policies, there are a few that specialize in competitive policies for smokers. An occasional smoker can sometimes obtain non-smoker rates based on other health considerations.
Unfortunately, smoker term life insurance rates will always be higher than term life insurance rates for non-smokers, but that doesn’t mean that you have to pay exorbitant rates for your smoker term life insurance policy. In fact, with some companies you may even qualify for non-smoker rates.
