Term Insurance Plans and Policies for Smokers

• 9th Mar 2021
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Smoking cigarettes is not only bad for health, but it can also burn a hole in the pocket when it comes to buying a term life insurance for smokers. As smoking cigarettes leads to several health issues and untimely death, it causes financial implications for the family. However, you can safeguard your family by purchasing a term life insurance plan which protects them from any unfortunate event in the future.

Are Smokers Eligible for Term Insurance?

Smokers are eligible for term insurance. While purchasing an insurance plan, the insurance company will request the policyholder a few questions like:

• Do you consume any tobacco/nicotine products?
• When was the last time you consumed tobacco/nicotine products?
• Have you consumed a tobacco/nicotine product in the last four years?

The insurance company will also conduct various examinations to determine the policyholder’s health factors and smoking habits. If the policyholder is found to present incorrect information or lies, he may be subjected to below charges:

• Insurance scam allegation and punishment
• Insurance policy may turn null and void with no benefits
• No policy coverage or benefits will be granted

How Do Insurance Companies Identify Smokers?

Insurance companies categorise individuals into four types:

• Typical smoker: Smoker who has minor health issues.
• Preferred Smoker: Smoker who is fit and healthy.
• Table-rated Smoker: Smoker with obvious, and sometimes severe, health issues caused by smoking.
• Non-smoker: Individual who does not smoke

The classification of smokers helps insurance companies calculate the premium amount for a term plan. A low premium is awarded to people who do not smoke and maintain good health. This classification of smokers may differ as per different insurance companies.

What are the Premium Charges for Different Smokers for a Term Plan?

Typically, insurance companies will charge the highest premium for a table-rated smoker, then second-highest to a typical smoker and relatively low for a preferred smoker. In some cases, some insurance companies deny a term plan to a table-rated smoker if he/she is in a critical condition.

Why Do Insurers Charge High Premium from Smokers than Non-Smokers?

Smokers usually have a low life-expectancy rate than non-smokers. Hence, while providing insurance for smokers, the premium charges for an insurance policy might be higher as compared to premium charges for an individual who does not smoke. The insurance company will charge a lower premium for a policyholder who does not smoke and is healthy.

How to Find the Right Term Insurance for Smokers?

You can consider taking the following steps while finding the right term insurance plan for smokers:

• To choose the best term plan for smokers, it would be optimal to select a policy which offers high-coverage at a nominal cost.
• Opt for online insurance offers from trusted insurance companies like Kotak Life and select an online term planthat perfectly suits your requirements.
• Try communicating with a knowledgeable person who can guide to find the right term insurance plan.
• You must also research well and choose a term plan that offers you a range of riders to choose from which would enhance the coverage of your term policy.

- A Consumer Education Initiative series by Kotak Life