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No Smoking Day: How smoking impacts your life insurance policy

smoking impacts your life insurance policy

Around the world, the second Wednesday of March is celebrated as the No Smoking Day in an effort to educate people to quit smoking and raise awareness about the ill-effects of smoking tobacco. The need for creating awareness on this is of acute importance, for smoking tobacco is the leading cause of preventable deaths. As per data, smoking causes cancer, heart disease, stroke, lung diseases, diabetes, and chronic obstructive pulmonary disease (COPD), which includes emphysema and chronic bronchitis. It is also noted that on an average, smokers die 10 years earlier than nonsmokers.

Insurance companies across the world have been one of the leaders in spreading awareness against the hazards of smoking. This is because a smoker – whether a chain smoker or a social one, is categorized as a riskier life to insure as compared to a non-smoker.

This leads to higher premium costs for people who smoke, as compared to their non-smoking peers of the same age and medical conditions.

According to Suresh Agarwal, Chief Distribution Officer, Kotak Life Insurance, “Smoking has a long term detrimental impact on the health of the individual which ultimately means there is higher risk of adverse health conditions or early mortality. Therefore, the premiums for a smoker are higher in comparison to a non-smoker. Again, it varies based on medical reports and factors such as age and medical history.”

While smokers can still avail a life insurance policy at 30-40 percent higher premiums, the situation becomes tougher when one has other lifestyle diseases or pre-existing health conditions. As per Atri Chakraborty, Chief Operating Officer, IndiaFirst Life Insurance Company, “The entire life insurance universe has now two rates of premium – smoker and non-smoker rates. However, smoking in presence of any other health adversity makes the health risk go highly adverse and in some instances force to defer the risk too.”

But what if one decides to play smart and not disclose their smoking habit? Though this may sound clever, in case of non-disclosure of relevant health facts, one’s policy can be nullified or in case the insurance company finds it post the death of the policyholder, his/her claim may even get repudiated.

“The risk gets impacted by the fact that many people choose not to disclose the habit, and this may impact the risk pool of the insurer and probably claims too,” says Atri.

“A life insurance contract is based on the principle of “utmost good faith”. Thus, it is imperative, and in the interest of the customer, to disclose all health related conditions transparently in order to ensure that there is no risk of repudiation of claim,” adds Agarwal.

While you may forego their awareness campaigns and warnings on smoking, your life insurance company would not. Choosing to quit would not only help you to lead a healthier life, but shall also ensure cheaper insurance premiums! This No-Smoking Day, choose wisely!

(Elizabeth Mathai is a Kochi-based content creator and a therapist, with expertise in insurance)

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