Smoking and Your Life Insurance Policy: What Happens if You Start?

By Team
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It’s a well-known truth that smokers pay higher life insurance rates.  The health risks of smoking have been well documented and insurance companies protect themselves from this higher risk by increasing rates for tobacco users.  Failure to disclose your smoking habits to your insurance company when you apply for a life insurance policy constitutes fraud, and could result in your policy being cancelled or a claim being denied.  But what happens when you start after you have already taken out a policy?

What Constitutes a Smoker For Insurance Purposes?

There are many levels of tobacco use, from the occasional cigar smoker to the heavy cigarette smoker.  For insurance purposes, there is no real distinction between casual and regular nicotine use.  When you fill out your insurance application, you will be asked about your tobacco use within a certain period of time prior to the application, commonly 6 to 12 months.  Any level of nicotine use during that time period will classify you as a tobacco user for life insurance purposes.

Started Smoking?

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Tobacco policies are issued with a higher premium than non-smoker policies, no matter how good your health might be aside from the smoking.  If you were a non-smoker at the time of your application, you will be issued a regular non-tobacco user policy.

Taking Up Smoking After Insurance Application

Should you start smoking after your life insurance policy has been approved and issued, it is difficult for your insurance company to find out.  There are some situations, however, in which you will find yourself facing some difficulty as a result.

Most insurance companies have a time period, called the contestability period, during which your life insurance benefits can be questioned.  If you die during that time period, there will be an investigation into the circumstances.  If the insurance company discovers that you misrepresented anything on your application, including smoking, they can deny the claim or adjust it to allow for the premiums you should have been paying as a smoker.

If you start smoking after having been approved for a non-smoker policy, you have technically not committed fraud, as you were in fact a non-smoker when you signed the papers.  In the event that your death occurs from a smoking-related illness within that two-year period, however, it may be difficult for the insurance company to determine exactly when you started smoking, and there may be some suspicion of fraud.  If there are signs of smoking for an extended period of time, your beneficiaries could lose out on the full amount of the policy benefit.

Smoking and Term Life Insurance

If you have taken out a whole or universal life insurance policy, taking up smoking won’t impact your premiums, because they are locked in for life.  Changes to your health status may not not affect your rates.  Term policies, on the other hand, expire or renew, and a new medical exam is often required to continue or obtain more coverage.  This medical exam and questionnaire is designed to uncover any changes in your health status since you first took out a policy, including taking up smoking.  Nicotine tests can show evidence of smoking.

If you have started smoking since you took out your initial term policy, you will no longer qualify for non-smoker rates, and will have to pay tobacco use rates on any renewal or new policy.  Since you will be older than when  you first took out life insurance, this can mean a large increase in your premiums.  If you renew your life insurance policy and fail to disclose on a medical that you have started smoking, this is considered to be fraud.

If you cancel any life insurance policy including whole life, or it lapses, you may be required to re-apply and disclose any changes, including smoking, at that time.  It is always best to keep a life insurance policy in force to avoid rate increases.

Quit Smoking and Save

Whether you have gone back to smoking after quitting or have recently started, quitting can save both your life and a lot of money.

Your insurance company will consider you a non-smoker again after 12 months.  The sooner you quit, the sooner you can apply for reduced insurance premiums and a non-smoker policy.  The health benefits to sticking to your New Year’s Resolution and giving up tobacco mean you are likely to live a longer, healthier life.