The slogan “Smoking is injurious to health” is very visible everywhere you go. The irony is that it is written on the packs of cigarettes sold at numerous small stores. Despite knowing this fact, many people fall into this addiction and realise it is incredibly hard to get rid of. More than that, it can cause a wide range of respiratory illnesses and even change the quality of life for many people. In many cases, it can lead to cancer and even death. In India, more than a million deaths due to tobacco consumption happen each year. 

In addition to health issues, being a smoker can also have negative effects on your financial health. You get a perfect example of this while buying term insurance. Life insurance premium is often calculated on the basis of factors such as your job profile, lifestyle, and the term insurance riders you select. For instance, if your job profile has a high risk factor, you would have to pay a much higher premium. On the other hand, people with low risk jobs may get a lower premium. Since, smoking puts your health and life at risk, it impacts your term insurance as well. Here is a breakdown of how smoking affects buying term insurance: 

Classification of smokers categorised by insurers

Term insurance providers often have three categories for people who are a smoker. These include typical, preferred, and table-rated smokers. The first group is the person who smokes and has a health issue. The second group includes those who do not smoke and are not prone to suffering from a major health problem. Lastly, the third category of smoker is the individual who smokes and has a major health issue. Your category will determine the premium that you will be charged for your term insurance plan.

When you buy a term policy, the insurance provider asks about many details related to you. One of these details is your smoking habits. The company collects this data to see if there’s anything that makes you a higher risk to cover. These inquiries can include details about how long you have been smoking, as well as the number of cigarettes you smoke in a given period of time. It may also include questions about any effects smoking has had on your health. 

Once you tell your insurance provider that you consume tobacco products, you can assume that you will be charged more for your policy. Based on the details of your smoking or any other form of tobacco consumption, you will be categorised into one of the above given categories. Even if you start smoking after buying a plan, you still have to inform the insurance company right when you start doing it after the purchase.

Effect on premiums

Apart from being harmful to your health, smoking is often frowned upon in society. It is essentially seen as putting yourself at risk. Similarly, smoking is often considered as a risky behavior by insurance providers. This is why, when buying a term insurance policy, smokers are often required to pay a higher premium. You can check the difference using a term insurance premium calculator.

The main reason behind why smoking is such a huge factor in determining premium is that tobacco is guaranteed to have a negative effect on their bodies. The nicotine present in the tobacco is proven to cause respiratory illnesses. Smokers, if they continue their habit, are surely going to have some health issues. This means there is a high mortality risk. It is because of the high health risks faced by smokers that insurance companies consider them as a higher death risk. This means that their premiums will be much higher regardless of any other circumstances. Moreover, smokers might face some restriction with term insurance riders as well.