What Would Designate You a Tobacco User by Life Insurance Companies?

What Would Designate You a Tobacco User by Life Insurance Companies?

Are you an e-cigarette user or use tobacco products at all? What would designate you a tobacco user by life insurance companies? Tobacco rates are much higher than non-tobacco rates. Tony Steuer, noted life insurance author explains how the usage of tobacco or nicotine replacements will increase your premium; the only question is by how much.


Every life insurance company treats the different forms of tobacco – cigarettes, cigars, and chewing tobacco – in their own fashion, which is why companies will ask you very specific questions during the application process.

For example, “Have you used any tobacco products in the past 12 months?” or “When was the last time you used any tobacco products?”

Insurance companies will use this information to determine if you are a smoker or not. If you are labeled as a smoker, the next step is to determine which smoker risk category you will be placed in.

Rate classification for tobacco usage depends on the type of tobacco being used and for how long. Generally speaking, insurance companies don’t differentiate between an occasional smoker and a pack-a-day smoker. Essentially, they believe the risk factors are the same and should be rated as such.

However, if you a heavy tobacco user, you may have other health related issues (e.g., high blood pressure) because of the tobacco usage. Meaning, you will be placed into a higher risk category and ultimately pay a higher premium than an occasional or non-smoker.

For non-tobacco classes, it will depend on the date of the last usage of tobacco.

There is a wide range of how life insurance companies treat those who use tobacco. A couple of considerations are the type of tobacco used and, if no longer using tobacco, the last date of usage.

Since insurance companies treat tobacco usage in different ways, it is critical to have an adviser who has access to a number of companies who will ultimately find you the best quote.

Your (higher) insurance premium will depend on a series of factor, which includes the type of tobacco, amount of coverage you want, your heath and your age.

A special note for cigar smokers is that some companies will consider you a non-smoker if you smoke cigars only occasionally (less than 10 a year – typically) and test negative for nicotine on lab tests.

If a insurer finds out, at any time, that an insurer misrepresented information regarding tobacco usage, they will rescind the policy as a material misrepresentation. Meaning, they will cancel the policy, thus defeating the entire purpose of obtaining coverage.

However, if you eventually decide to using tobacco, you can get your rate reduced by getting reclassified. Most insurance companies consider someone a non-smoker who hasn’t used any tobacco products during the last 12 months.

Some insurance companies will pay the death benefit based on the amount of coverage that the premiums paid would have purchased on a smoker basis; however, the majority do not, as this is not fair to the truthful applicant.


By Tony Steuer, CLU, LA, CPFFE

Tony Steuer is an author and advocate for financial preparedness. Tony Steuer, CLU, LA, CPFFE, helps people make sense of the financial world in a way that’s easy for them to understand. His books including, “GET READY!,” “Insurance Made Easy,” and “Questions and Answers on Life Insurance,” have won numerous awards. Tony is the founder of the GET READY! Initiative which includes the GET READY! financial organization system, the GET READY! Financial Preparedness Club, GET READY! Podcast, and the GET READY! Financial Principles, a best practices playbook for the financial services industry. Tony served as long-term member of the California Department of Insurance Curriculum Board. Tony is regularly featured in the media including the New York Times, the Washington Post, Fast Company, and other media. He has also appeared as a guest on television shows, such as ABC’s “Seven on Your Side.” Visit https://tonysteuer.com/ to join the GET READY! Financial Preparedness Club and access free resources.

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