A recent study says, the premium of your life insurance policy is affected more by your smoking habits than the job profile – jobs with high fatality rates have higher premiums. The details of the report reveal that the smokers across all occupations pay an average of 50% more for their life insurance in comparison with the premium paid by non-smokers. This means, on an average, a smoker pays Rs 650 to Rs 850 more monthly for their life insurance policy than non-smokers, equating to Rs 8,000 to Rs 10,000 per year.
Smokers pay higher premium Life insurance premium is often calculated considering the job profile of the policy seeker. While the life insurance premium for people with high risk job profiles like construction workers and prison officers is quite high, people with low risk job profiles like bankers and software engineers pay a lower premium for life insurance policy. By splitting each industry into smokers and non-smokers in order to assess their respective premiums, the data revealed that a smoker in a relatively low risk job profile industry will still be paying significantly more each month for life insurance than a non-smoker in a high risk job profile.
An important reason why smoking has a much bigger impact on the life insurance premiums than most job profiles is proven detrimental effect of smoking on people’s health. While even the highest risk job profiles are still very unlikely to result in death, smoking is the primary reason for a plethora of life-threatening diseases. Smoking tobacco for long has been associated with rising incidents of life threatening diseases like lung cancer, tuberculosis, heart ailments, strokes, bronchitis, infertility, and peptic ulcer.
Every year, approximately 10 million tobacco-related deaths occur globally and India alone accounts for one-sixth of the deaths. In total, there are over 120 million smokers in India i.e. around 12% of the world’s smokers. As per industry pundits, the total number of tobacco-related deaths are expected to across 14 million by 2030 globally. When looking for life insurance cover, individuals must always thoroughly review the market looking for the most competitive plans available and in case you already have a life insurance cover, you should review it regularly.
Usage frequency In order to determine the premium of your life insurance cover in case you are a smoker, the insurer inquires about your usage frequency of tobacco products in the last one year. This would include all tobacco-based products like cigars, cigarettes and even chewing tobacco. Based on the information provided by the policy seeker, it is entirely the prerogative of the insurer to determine whether or not an individual is a seasoned or an occasional smoker. Basis this, the insurer decides to charge loading (increase in premium) on the life insurance policy premium or even terminate the policy considering the level of risk involved. In case you do not disclose your smoking habits with the insurer at the time of issuing of policy, it can result in abatement of the claim.
In case the life insured or a new customer provides misleading information to the insurer regarding the smoking habits under the fear of high premium, this may go against the life insured or the policy seeker. While most insurers ask the potential customers about their smoking habits verbally, they can even ask for a physical exam in some cases or request for a recent medical history.
While it may be easy to lie verbally, it is practically impossible to cover up the traces of nicotine in the medical test even if you are an occasional smoker. To stay adequately cover, the customers need to be honest with the insurer about their smoking habits as life insurance companies take smoking as a serious clause and are extremely strict about it.
If you are a smoker, you must immediately stop smoking and rather educate people around the dangers attached with the use of tobacco in any form.