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Term Insurance: Smokers vs Non-Smokers

Smokers are also eligible for term insurance policies but their terms and conditions are quite different from non-smokers. Click here to know all the conditions.

  • 2,978 Views | Updated on: May 22, 2024

Regardless of the fact that people are all mindful about smoking being injurious to health, some still get addicted to the habit. For such people, it could be a coping mechanism, a stress release, or maybe something they generally prefer. While smoking is certainly harmful to one’s health, it can also cause a blow to your finances.

A common means for most people to strengthen their financial security is through insurance plans. However, their smoking habits can have a detrimental impact on the plans they choose, the premiums they pay, and even the payout they receive. Read along to understand the substantial differences among smokers and non-smokers when it comes to term insurance plans.

Term Plans for Smokers

  • Who are Smokers as per Insurance Providers?
  • Anyone who consumes tobacco or nicotine through cigarettes, pan masala, bidi, gutka, or cigars is classified as a smoker by insurers. Before you buy a protection plan, you are generally asked some particular questions like when you last smoked, your smoking habits, and what means you use to smoke. Moreover, it is advisable to provide full medical data and reports when you are filling the insurance proposal form.

  • Term Insurance for Smokers
  • Smoking shortens your life and exposes you to a host of other risks. Therefore, the need to safeguard your loved ones and future is more critical if you are a smoker. A term insurance policy can help your family members with debt repayment, school and college tuition, daily expenses, travel, and other payments.

  • Why is the premium higher for smokers than non-Smokers?
  • In comparison to non-smokers, smokers often pay a higher insurance premium. This is owing to the fact that they are more susceptible to illnesses and fatalities. Because the risk of death from smoking is high, insurers charge greater premiums to compensate for the increased likelihood of claiming the coverage.

Term Plans for Non-Smokers

  • Who are Non-Smokers as per Insurance Providers?
  • Non-smokers are those who do not have burn-through consumption of nicotine or tobacco through cigarettes, stogies, gutka, and other forms. Do note, any individuals who formerly used to smoke however have not in a year prior the date of buying general life insurance are also called non-smokers.

  • Term Insurance for Non-Smokers
  • After conducting essential health examinations, premiums for non-smokers result in extremely low rates for substantial covers. Furthermore, the earlier you purchase, the lower the premium you will pay.

Claim Payout Ratio for Smokers vs Non-Smokers

The claim payout ratio is the number of claims paid split by the number of claims submitted; thus, the higher the ratio, the better for the insurer. It is generally known that smokers file 1.5 to 2 times the number of claims as non-smokers.

To wrap it up, a term plan for smokers and non-smokers irrespective is an important financial instrument to ensure that your family is protected when you are gone. Furthermore, with so many options, finding a term plan that suits your budget is evidently becoming effortless. However, you should always share your medical history while buying a plan to ensure you and your family don’t have to face difficulties while claiming. Additionally, you should remember that the terms and conditions of each policy varies. Therefore, you should analyse your needs and conduct thorough research to choose a plan that offers a better future tomorrow!

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Kotak e-Term

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  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435