How tobacco consumption impacts your life insurance premium

Health Insurance

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KEY HIGHLIGHTS

  • When you apply for most types of life insurance, you must confirm whether you are a smoker.
  • Insurance companies decide your premium rates based on your age, health, and other risk factors.
  • Once identified as a smoker, you are likely to pay much higher life insurance premiums than non-smokers.

New Delhi: India is the world’s second-largest producer and user of tobacco. Even though the Indian government has issued specific health warnings for all tobacco products, almost 267 million adults over 15 continue to use tobacco because it is inexpensive. The most prevalent form of tobacco use in India is smokeless tobacco – khaini, gutkha, betel quid with tobacco and zarda, followed by smoking forms of tobacco like bidi, cigarette, and hookah.

Tobacco usage is one of the most severe public health hazards worldwide. It possesses significant risk for many respiratory and chronic diseases, including cancer, lung disease, cardiovascular disease and stroke, and accounts for nearly 1.35 million deaths every year. Smoking is not only harmful to health and leads to loss of life but also burdens people’s finances. It disproportionately affects India’s most vulnerable population classes, including women, youth, and those with lower incomes.

According to a recent study by the Journal of Nicotine and Tobacco Research, the annual direct economic costs attributable to Second-Hand Smoking in India have amounted to INR 567 billion. This accounts for 8% of total annual health care expenditures on top of the staggering $27.5 billion in yearly economic burden from tobacco use.

“Tobacco consumption also adds financial burden to the basic need of buying a life and health cover. When you apply for most types of life insurance, you must confirm whether you are a smoker. Insurance companies decide your premium rates based on your age, health , and other risk factors. Once identified as a smoker, you are likely to pay much higher life insurance premiums than non-smokers. As tobacco possesses the highest-risk behaviors in terms of health, life insurance premiums for tobacco users usually spikes., ” said Nitin Mehta, Chief Customer Officer, Bharti AXA Life Insurance.

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“While smoker tests are the industry standard, even the smoking cessation products like nicotine gum and even nicotine patches are classified as high tobacco risk as it leaves traces of cotinine – an alkaloid found in the body after nicotine is metabolized. To be considered a non -smoker for life insurance purposes, you must be smoke-free for a year.Even if you haven’t smoked in months and don’t think the insurance company will be able to detect anything in your system, you should always be sincere when answering health questions during the life insurance application process,” Mehta further added.

Lying to a life insurance provider about your tobacco use can impact your life insurance policy’s claims and put your loved ones in financial jeopardy. It could also be seen as fraud and can result in legal ramifications.

Quitting or reducing your tobacco intake remains the most healthy and effective way to lower life insurance premiums. However, if you are a smoker and want life cover to protect your loved ones, you should do your research and pick a term plan that offers a range of riders, including critical illness cover, to choose from. The other options to consider include choosing the right sum assured, term of the policy, premium payment terms and mode of payment.

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