World No Tobacco Day 2023: How does smoking affect life insurance premiums?

From the well-articulated theme Commit to Quitting on World Tobacco Day in 2021 to a more appropriate and practical theme Grow Food, No Tobacco, the World Health Organization has kickstarted the world\’s choice between food and addiction. Beating addiction can be tough, especially when it\’s caused by a smoking habit.

As an aside, the global food crisis has prompted many world leaders to realize how the tobacco industry halts any attempts to replace tobacco plantations, thereby only hampering efforts to grow more food and obtain grains for a major portion of the population. global world.

Furthermore, smoking affects health, thus contributing to serious lung ailments and incurable diseases. The warning Smoking is harmful to health printed on cigarette packs is largely ignored and has aroused almost no interest among smokers to kick their smoking habits. The increase in illnesses has prompted many people to purchase health insurance and life insurance plans with of course insurance companies charging higher premiums than non-smokers.

Little does one realize how medical inflation has forced many people to either destroy their emergency corpus or take out loans just to pay for hospital and treatment bills. With healthcare becoming a more urgent need than ever before, awareness of the need to purchase health and life insurance policies has increased. More people bought life insurance plans during and after the pandemic than before the outbreak, thus suggesting the growing awareness among people of securing the future of their loved ones.

What many people continue to be blissfully unaware of, smoking affects life insurance premiums. The idea behind charging higher premiums to smokers is that these people are more likely to succumb to life-threatening illnesses and premature death. The risk factor for life insurance companies is higher as the families of policyholders are more likely to queue up for claims to be settled by them.

Life insurers don\’t charge premiums at random. For the purpose of calculating premiums, life insurance companies evaluate and evaluate based on certain parameters including age, gender, lifestyle, occupational profile, and so on. Smoking can be a huge obstacle to a healthy lifestyle, thus highlighting why smokers pay higher premiums than non-smokers.

Understand how smoking affects life insurance premiums for a 36-year-old policyholder who wishes to purchase a term insurance policy with a coverage amount of 2 crores.

Name of the life insurer

Name of the life insurance plan

Monthly premium rates for smokers (in Rs)

Monthly premium rates for non-smokers (in Rs)

ICICI Prudential life insurance

TATA AIA Life insurance

Bajaj Allianz life insurance

Bajaj Allianz Vita eTouch

Source: PolicyBazar

Check out the premium rates and you\’ll see how smokers pay much higher premiums than non-smokers.

Insurance companies ask questions about smoking or tobacco chewing habits when filling out the proposal form. In the proposal form, customers are also asked how often they smoke or chew tobacco products. Underwriters evaluate customers\’ lifestyles from the responses, thereby helping them decide whether to issue the insurance, charge higher premiums, or reject the offer altogether.

Some people also tend to lie about their smoking habits while buying insurance. This can be a bone of contention while claiming the insurance amount or claiming the life insurance payment.

Also, if the policyholder withholds information about smoking habits that may later be disclosed to the insurance company, the insurance company may consider this to be fraud or a scam and the policy may be voided. The end result is that claims made to the insurance company will not be accepted in this situation.

As the world observes World No Tobacco Day in 2023, each of us must commit to banning all types of tobacco use in our lifetime so as to ensure both good health and a healthy life in the long term.

Term life insurance is often ignored by Indian employers.

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