A 60-Second Guide to Life Insurance for Smokers

Both my mom and her mom were smokers. My mom still is. My grandmother stopped smoking when we used her failing memory to trick her into thinking she had quit smoking years ago. Not exactly the proudest moment in my life, but it got the job done. I plan to use the same strategy with my mom in about ten years (mom, if you’re reading this, just kidding--NOT). And that brings me to the cost of life insurance for smokers.

It’s no surprise that smokers pay more for life insurance, all other things being equal. If your insurance company labels you as a smoker, they place you in the smoker risk category which means your premium will be higher than it is for non-smokers. It’s a sobering reality, but the mortality rate for smokers is much higher than it is for those that don’t smoke.

With that being said, insurers assess each case individually. Below I've put together some common questions and answers that you may find helpful if you smoke (or were a smoker) and are looking for life insurance.

How life insurance companies define smokers

Companies use very specific questions to classify you as a smoker or not. Being defined as a smoker refers to your use of cigarettes, cigars, and chewing tobacco. Even using a nicotine patch or gum can qualify you as a smoker. That may seem counter-intuitive, but insurance companies are looking for any form of nicotine use.

A common question on an application is “Have you used a tobacco product in the last twelve months?” If you answer yes to this question, you will most likely be considered a smoker and be expected to pay a higher rate. Insurance companies generally don’t differentiate between an occasional smoker or a pack-a-day smoker. In the eyes of the insurance companies, the health risks are basically the same, and often so are the rates, all other things being equal.

Of course, if you smoke a pack a day you may have resulting health issues (e.g., high blood pressure) that can also increase your rates as compared to a non-smoker or occasional smoker. Life insurance companies will classify your health into one of several categories. While these categories vary from one insurance company to another, classifications can include:

Preferred Plus
Preferred
Standard Plus
Standard

A smoker and non-smoker may be classified as Preferred, for example, based on their age and medical condition. But the smoker will pay considerably more in premiums.

What about the occasional cigar

If you fire up a cigar every now and again on the golf course, do you fall into the smoker category? The short answer appears to be no if you are an occasional cigar smoker who reports lighting up a few times a year for a celebration. For the sake of life insurance, this does not make you a smoker. But keep in mind that life insurance companies vary in their underwriting standards, so you could get a different classification from one company to the next.

How much will smoking raise your premiums?

The big question is just how much smoking will cost you. And this is where shopping for multiple life insurance quotes is critical. You will find significant variance among insurance companies. But exactly how much more a smoker will pay depends on a host of factors, including the type and amount of life insurance, your age, and your health. Jeff Rose over at Good Financial Cents has a nice article showing the cost of life insurance for smokers is almost four times more than non-smokers.

What happens if you lie about smoking and get caught?

It might seem harsh, but lying about being a smoker is insurance fraud and that is not something taken lightly. There can be severe consequences for lying. Take this scenario, for example, You pass your medical exam and secure an insurance policy as being a non-smoker. If you die and the insurance company learns that you were a regular smoker, the life insurance claim could be denied. And if you refuse a policy because you were offered smoker rates and then you apply at a different company, they too can view your medical records on file. Your medical exam results are kept for seven years in a database operated by the MIB Group.

Your best bet is to tell the truth from the beginning and just accept the fact that if you smoke you will have to pay more for your policy. If you report you are a smoker and then down the road you quit smoking, you could get reclassified and have your rate reduced. Different insurance companies often have different rules in regards to how long you have to be smoke-free, but 12-months is a good rule of thumb.