When it comes to term insurance policies, insurers are incredibly picky. Subsequently, there are strict eligibility criteria to decide who can or cannot get a term insurance plan. These eligibility criteria also account for your habits and lifestyle, including smoking.
Since smoking is a voluntary action that may contribute towards deteriorating health conditions, thereby increasing the risks of payout, term insurers are particularly careful about considering these portfolios. However, since smoking is quite a common habit in India, the providers can’t bypass the entire pool of potential policyholders. Thus, they offer term insurance plans after imposing a few restrictions.
Now, the question is, if you are a smoker, should you avail yourself of a term insurance plan? Or should you quit before you start shopping around for a term insurance policy? Well, from the health and fitness point of view, of course, you should quit smoking! However, from a term insurance POV, here’s how the perks differ!
Read and decide for yourself!
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Who are Smokers As Per Term Insurance Providers in India?
As stated before, term life insurance providers are pretty stringent about their eligibility criteria. Thus, when it comes to habits like smoking, they are extremely rigid, considering that such habits can lead the way to critical ailments or fatalities.
Say, suppose you are a policyholder with a Critical Illness Rider or Terminal Illness Benefit or even if you have a vanilla term insurance plan. In that case, the insurance provider is looking at a huge payout (since term insurance plans offer substantial cover amounts at affordable premiums). Considering that this is detrimental to their financial health and future sustainability, insurers adhere to some strict rules when dealing with policyholders with smoking habits. This includes defining who are smokers -
- According to term insurance providers, anyone who uses tobacco or nicotine products, whether smoked or smokeless (such as gutka, bidi, pan masala, or cigarettes), is classified as a smoker.
- To avoid being categorised as a smoker and facing higher premiums, you generally need to have stopped smoking for at least 1-2 years, depending on the insurer. Although you must disclose your past smoking habits, insurers may not charge you the increased premium if you have abstained for the specified period.
Now, say you are a smoker as per these points stated above. How does this habit affect your term insurance policy? Let’s find out!
How Does Smoking Affect Your Term Insurance Plans?
Smoking leads the way to fatal ailments or chronic health conditions that require extensive funding for treatment. Subsequently, term insurance providers categorise smoking policyholders as high-risk cases and hence demand a higher premium. While the premiums can vary between genders and also from one insurance provider to the other, the spike is imminent.
Here’s a look at how these premiums differ -
However, if these differences in premiums are leading you to think that you can smartly evade this spike by simply avoiding mentioning that you smoke in your term insurance application questionnaire, then here’s an example explaining the possible consequences -
Antara, a 25-year-old, decided to purchase a term insurance policy. Although she was a smoker, she did not disclose this on his application since she had quit smoking a few months prior.
Years later, Antara had a cardiac condition and passed away. Because she failed to mention her smoking history, the insurer could
- reject her claim,
- reduce the payout significantly, or
- cancel the policy entirely.
Insurance companies often investigate a policyholder's medical history and may look for evidence on social media or request nicotine tests. They may also conduct interviews with friends, family, and doctors or review medical reports. If they find evidence that Antara had lied on her application, they can deny the payout.
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