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Life Insurance For Smokers
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We all know that smoking is not good for you. Life Insurance companies know that too. Your age and smoking status are the two primary factors used by an insurance company to determine the cost of life insurance premiums. Depending on your age, life insurance premiums could cost up to three times more for a smoker, than for someone the same age, who is a non-smoker.
Let me give you a few of examples of a Canadian insurance company's rates. I will use a $200,000 10 year term policy, for three different age groups, to illustrate the cost difference.
Non Smoker Monthly Cost Smoker Monthly Cost
Male / Age 25 $ 14.85 $ 23.13
Male / Age 45 $ 27.27 $ 64.27
Male / Age 55 $ 60.75 $167.49
As you can see, whether you are a smoker or non-smoker, the older you get, the more expensive the insurance becomes. However, notice how much more the cost of insurance increases if you are a smoker, vs. a non-smoker. For the age examples listed, the non smoker cost, on average, almost doubles at the ages listed; whereas the cost for smokers almost triples for the same age brackets.
If you are a smoker, how could you eventually qualify for non-smoker rates? The simplest way would be to quit smoking. Although that is easier said than done, if you are smoke free for one year, the insurance company may qualify you for non smoking rates. Another way is to ask your insurance broker about the innovative ways life insurance companies are pricing their policies in today's marketplace. I will give an example.
One company I work with, allows smokers to pay the non smoker rate for the first two years of being a policyholder. If you then successfully quit smoking for at least 12 consecutive months, at the end of year two, you can apply for non-smoker status. By answering a questionnaire, and submitting medical evidence approved by the insurance company, you may be able to continue the non-smoker rates. If you continue to smoke, then your premiums will be charged at smoker rates. Whether you are successful in quitting or not, this is an excellent opportunity to purchase life insurance at non-smoker rates, and be given the incentive to quit smoking, to maintain less costly rates.
One final suggestion I would like to make if you are a young smoker, is to purchase life insurance while you are still young. Looking back at the example of the 10 year term policy, $23 per month is very affordable. As you get older, and continue to smoke, your coverage is guaranteed renewable, meaning you do not have to produce medical evidence at the end of the 10 year term. So if you develop a smoking related disease such as lung cancer, or emphysema, you can continue your coverage without medical evidence at the new rates. Just imagine being diagnosed with lung cancer, and not having or not being able to purchase life insurance, because you never bought it while you were young and healthy.
I hope you have found the information in this article helpful.
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