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Best Life Insurance for Tobacco Users

Licensed Life Insurance Agent/Staff Writer
April 10, 2020

If you use or have used tobacco, you have plenty of options for life insurance. But your habit could make obtaining a life insurance policy more complicated. 

While most insurers offer life insurance to current and former tobacco users, who they consider "a smoker" and how they price policies varies widely. Here's what you need to know about buying life insurance for tobacco users.

Tobacco use and life insurance

Plenty of life insurance companies offer policies to tobacco users, but they may limit the type of policy you apply for, cap your death benefit choices, or put you through a more rigorous underwriting process. And you'll almost certainly pay higher premiums than your non-smoking peers.

However, unless you have pre-existing health conditions (related to tobacco use or not), your habit is unlikely to exclude you from life insurance coverage altogether.

They key to understanding your chances of obtaining the coverage you want at an affordable price is knowing how insurers define and categorize tobacco users.

what defines a ‘smoker’

Definition of a smoker

You may be surprised by how little it takes to be considered a smoker or other tobacco user. Some companies' underwriting rules don't consider the nuances of a tobacco habit. That means those who smoke a pack a day may be in the same category as those who had a single cigarette after a particularly rough day six months ago.

Many life insurance companies view other tobacco users the same way, including the following forms:

  • tobacco chew
  • dissolvables
  • nicotine gum or patches
  • vape and e-cigarette products
  • hookah and other water pipes

Of course, every insurer's definition of a smoker varies. You may be able to learn about where each company draws the line by the tobacco-related questions on its application. A single yes-or-no questions means you're likely to be lumped in with all tobacco users. If the application asks what forms of tobacco you use or how often you imbibe, the insurer may consider these nuances when pricing your policy. Either way, however, you'll be considered a smoker.

Life insurance providers will also consider the length of time you have consumed tobacco. For example, most companies will ask you whether you have smoked within the last year. Although it is less common, there are some companies that increase this to five years.

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Why are life insurance tobacco rates higher?

So why do people who smoke pay more money for a life insurance policy? When providers evaluate an application, they are essentially trying to work out the life expectancy and this is why we have to undergo medical examinations and various questions.

According to the Centers for Disease Control and Prevention (CDC), the average smoker will die ten years earlier than the average nonsmoker.1 That means an insurer is more likely to pay out a death benefit after bringing in fewer premium payments from smokers. To account for this cost, insurers charge smokers higher premiums.

If you don't smoke your tobacco, you may have less risk of developing a pulmonary disease, but you may still be susceptible to some cancers and other conditions that can shorten your life span.

Life insurance health classifications

Most insurers evaluate tobacco users on a separate scale from non-tobacco users.

When assessing non-smoker applications for life insurance, there are various life insurance health classifications which determine the premiums one will pay. There are five levels of health classes for non-smoking applicants, listed below from best to worst:

  • Preferred Plus
  • Preferred
  • Standard Plus
  • Standard
  • Sub-standard

While every company has its own guidelines for how to categorize applicants, there's a general trend. Preferred Plus is typically for those in the best health with no dangerous habits and no family history of health problems. Someone with a few minor health problems might be considered Preferred, while someone with a history of health issues or being overweight might be placed in Standard Plus or Standard. Finally, Sub-Standard is typically for those with a chronic illness or dangerous lifestyle. 

But things work a bit differently when it comes to tobacco users.

Tobacco health ratings

With smokers, the system is different and actually simplified. Instead of the five levels, there are just three; preferred smoker and standard smoker, with substandard smoker rates also available.

Although we said that all smokers go into the same category, health does play a part and poor health will lead to higher premiums than those who are otherwise healthy. As soon as the company finds out that you are a smoker the normal classification system will not be available regardless of how frequently you smoke.

Price difference for tobacco users

So far, we have discovered that tobacco users pay more for life insurance but how significant is the difference? Unfortunately, it isn't good news because many will pay at least double for the same coverage. In truth, this could be considered a minimum estimate because some have been known to pay four times as much for their premiums compared to non-smokers.

Example - If we use a 45-year old male as an example, a healthy version would pay around $50 per month for coverage of $500,000 on a 20-year term life policy. If this male smoked, the same length and coverage would automatically increase his premiums to somewhere between $150-$250. Of course, this is just an average and you may be able to find a policy only 30-60% more expensive (we will have some tips for this later!) but it still shows the impact smoking can have.

Life insurance and marijuana

With this topic, there always seems to be a question about marijuana and life insurance and this is something for which we will struggle to give a definitive answer. Every year, the stance of the US changes towards marijuana because most states have legalized the drug for medicinal purposes.

On the other hand, many others are starting to legalize marijuana for recreational use so this will very much depend on where you are currently living. In the past, the entire life insurance industry was a little behind with marijuana use but this has now changed.

First and foremost, we would say that honesty is the best policy. If you use marijuana, let your agent know so he or she can put it on your application.

Some companies are more friendly when it comes to marijuana use than others. The industry is slow to adapt, and this includes how companies perceive marijuana use. Some companies won't care much while other will certainly increase your premiums just as we have seen with tobacco.

Finally on this topic, marijuana being used for medicinal purposes will not affect your application in itself. Instead, the actual medical condition requiring you to consume marijuana for medicinal purposes is the variable that will contribute to your eventual premiums.

How to get the best life insurance for tobacco users

If you are a smoker and you need advice, we have some superb tips down below as well as general misconceptions that exist. With this information and everything above, you will be in a great position moving forward!

 Be honest

Knowing that even a small amount of tobacco use could affect your rates, it might be tempting to stretch the truth a little. But if you do, you'll be making a material misrepresentation and putting your coverage in jeopardy.

If the insurer discovers the inconsistency during the application process, it could result in an automatic decline of your insurance. If your misrepresentation is discovered within two years of approval, your coverage could be canceled. And if it's discovered after your death, your beneficiaries may not receive the full death benefit.

In short, it's best to be honest, even if that will result in higher life insurance premiums, or you'll put your coverage in jeopardy.

Shop different life insurance companies

When people say ‘life insurance for smokers is too expensive’, it is normally because they get one quote and are then put off for the next few months or years. However, a quote from one company alone is not going to give you an accurate reflection of the market; what if you just happen to get a quote from the most expensive company in the market?

With some companies, they might not consider chewing tobacco or cigars as an issue so you should always see what is around before making a decision one way or another. Even if you are happy with the first price you see, it is always worth digging deeper.

Buy Early

Admittedly, this isn't something that will help you if you are now older and didn't buy insurance as a younger adult. However, we recommend buying insurance as early as possible if you are still young. Why? Because life insurance is an expense that only ever gets more expensive. As morbid as it sounds, we are constantly getting older and our health is always deteriorating. Therefore, buying early will see you secure the best possible rates for yourself.

Resubmit an application after quitting

For some reason, life insurance is seen as an inflexible being but this isn't always the case. If you happen to quit smoking and are free from nicotine for at least 12 months, it is worth contacting your provider because they might order a new medical examination. If this exam backs up your claims, you could see a reduction in your premiums moving forward. This is one way the life insurance companies incentivize its clients towards a healthy lifestyle.

Contact a licensed, independent life insurance agent

If you want unparalleled access to the life insurance market, choose a licensed agent who is not beholden to any one company. Agents who work with multiple companies can help point you toward insurers with the best coverage and rates for your tobacco use and other health conditions. Life insurance applications can be detailed and time consuming to fill out, and asking an agent to point you in the right direction can save you time and money.

Tobacco users have life insurance options

There we have it, your guide to life insurance for smokers and tobacco users. As you can see, buying coverage is possible and we hope to have helped somewhere along the line today. Tobacco users will likely pay more to offset the higher risk tobacco causes, but you can reduce this jump in price by paying attention to the tips above. If you are willing to quit, resubmit in the future, work with an agent, and compare the market, affordable life insurance coverage is achievable.

Sources
  1. Centers for Disease Control and Prevention, "Smoking and Tobacco Use Fast Facts"
Written by
Kathryn Casna
Kathryn Casna is a licensed insurance agent and life insurance specialist who has appeared on The Simple Dollar and Best Company. On a weekly basis, she dives into complex life insurance topics to wring out genuinely useful information. When she’s not wrangling big ideas into easy-to-understand articles, Kathryn nerds out on budget-tracking spreadsheets and tries to coax her leash-trained cat to take outdoor adventures.