Of course, smoking is hazardous for health, but it may cost you financially. It is equally important for everyone to stay updated with their insurance planning with other financial planning matters.
Smoking increases the probability of untimely death, which means an additional risk for the insurance company.
Also, the numbers from WHO and Indian Health Ministry regarding deaths due to tobacco usage should concern you if you are an active smoker.
Who are the smokers for an insurance company?
It is not limited to the person who has smoked in the last one year, but all who consume nicotine-based products, cigars, gutka, etc. are included in this category. Some companies have started asking whether you consume tobacco or not, which includes all tobacco-related products.
Premiums for smokers should not affect your decision to buy a policy
Due to the high-risk category, a smoker needs to pay higher rates for a policy, as compared to normal rates. The premiums will vary with the amount of cover and your age, and are 40% to 50% higher than normal rates.
You should not postpone insurance planning or cancel the purchase of insurance policy just because of the premiums, as the insurance is a must for financial protection against any uncertain event.
Hiding tobacco consuming habits is never a good idea
Have you ever thought of not disclosing your habit of smoking in your insurance application? Please never make this mistake. Yes, the insurance company may issue a policy with non-smoker rates, but it may cause a big blow in case of a claim.
Tobacco consumption puts you at high risk, as it may cause non-communicable diseases like cancer, diabetes, cardiovascular disease, etc. If you purchase the policy without disclosing your habits and if you die due to any illness caused by tobacco, your loved ones may not get anything.
If you were a non-smoker when you bought the policy and started smoking afterwards, you need to disclose this to your insurer.
Likewise, if you have purchased the policy with smoker rates and you quit smoking, and you are a non-smoker for at least a year, you can update the same to your insurer, which will result in lower future premiums.
One should always give importance to insurance planning the way you give to other investments. Be honest with your insurer; otherwise, you won’t get appropriate financial protection in an unwanted situation.