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GUIDE: Term life insurance for smokers

by Mark Cluett
10 min read

One of the biggest barriers for Canadians considering life insurance is what they perceive as the high price of insurance premiums. This is especially true with term life insurance for smokers; those who are addicted to cigarettes often assume the price of life insurance premiums are so prohibitively high that they shouldn’t even attempt to apply.

The truth about term life insurance for smokers lies somewhere in the middle. While there are certain situations where the price of life insurance for a smoker can give one pause for thought, there are also those situations where the premium and circumstances are much more amenable to one’s current situation. This guide will shed light on how smoking affects life insurance premiums, and what a smoker can expect when searching and applying for term life insurance.

KEY TAKEAWAYS

  • Smoking and tobacco consumption has a significant impact on life insurance premiums
  • Consumption of any form of tobacco, even a single cigarette or e-cigarette, in the last 12 months classifies you as a smoker, for life insurance purposes
  • Some companies are more flexible with occasional cigar usage
  • Life insurance premiums for smokers can cost as much as 50 to 100% more than those for non-smokers
  • If you have quit smoking and not used tobacco for 12 months, you can apply to have your rates reduced to non-smoker status

Can I get life insurance if I smoke?

Yes, of course you can get life insurance if you smoke or consume tobacco. The incorrect assumption that smokers cannot qualify for life insurance of any kind stems from the fact that coverage for term life insurance is much more expensive for those who smoke than those who do not.

How does smoking affect my life insurance?

The stress that cigarette smoking inflicts on one’s body has lasting detrimental health effects. Tobacco consumers are much likelier to have health concerns later in life like cancer, heart disease, and stroke. While there are many more repercussions to smoking, it is these deadly medical conditions in particular that make a smoker’s life riskier to insure. Thus, term life insurance for smokers, especially those past the age of 40, is more expensive than that for non-smokers.

How much more will it cost if I smoke?

Canadian insurance companies offer rates on most of their term life insurance products specifically for smokers. These rates may have a smaller  difference between those for smokers and non-smokers in the early years, but the difference is substantial as applicants age. Depending on the age of the applicant and amount of coverage applied for, prices for life insurance for smokers can be higher by 50 to 100% compared tothose for  non-smokers. More on that below.

The following chart shows representative pricing for a 20-year term life insurance policy with a death benefit of $500,000. The model assumes the applicant is in good health.

Life Insurance Premium Prices: Smokers vs Non-Smokers

MALEFEMALE
AgeSmokerNon-SmokerSmokerNon-Smoker
30$58.41$30.60$40.05$22.50
35$80.86$32.85$61.65$25.65
40$126.45$47.58$88.65$35.10
45$205.09$74.35$138.15$53.55
50$323.95$123.29$215.10$85.95
55$535.24$222.98$331.17$154.43
60$832.22$392.76$522.00$283.36
65$1,347.30$681.75$875.70$479.25

Who is considered a smoker by life insurance providers?

Unfortunately there is no sliding scale for what is considered as smoking by life insurance companies. If you have had a single cigarette in the past 12 months, you are considered a smoker in the eyes of any potential insurance provider.

There are also other tobacco- and nicotine-based products that will affect your life insurance premiums. The use of cigars, cigarillos, chewing tobacco, nicotine gum, and nicotine patches can all be considered the same as smoking by some Canadian insurance companies.

There is some leeway with cigars and cigarillos depending on how many you smoke. An occasional cigar or cigarillo may be classified as a non-smoker as long as it averages out to one a month or less. Generally speaking from our industry experience, there is more flexibility on cigar usage by insurance providers than any other form of tobacco consumption when it comes to determining if an applicant is a non-smoker.

Will I have to take a medical exam to test for tobacco or nicotine?

In your application for life insurance you will be asked if you “smoke” and you must answer this honestly. Depending on your age and the amount of insurance you are seeking, insurance companies may require you take a medical exam (that requires urine and blood testing). Among other things, the blood test will also help them determine whether you smoke or not. 

Even in the absence of a medical exam, it is extremely important that you do not lie in your application. Insurance companies have what is called a “contestability period”, which is basically a two-year period in which they can rescind your life insurance policy and refund the premiums, if there is a material misrepresentation during the application process. 

This period begins from the time your policy goes into effect. If you die within this period and the insurance company finds out that you lied about your tobacco usage on your application, they have the right to rescind the policy and/or deny the death benefit to your beneficiary. 

Even after the 2 year incontestability period, insurance companies have the right to deny a claim, if they can establish that you had not correctly classified yourself as a smoker at the time of the application.

Can I quit smoking to lower my life insurance premium?

Yes, you can, but it’s not as simple as flipping a light switch. If you decide to quit smoking – for either personal or health reasons, or the potential savings on your life insurance premiums – there is no immediate effect on the price  your life insurance premium.

Instead, you would have to verify you have not smoked cigarettes or consumed any other tobacco products for 12 months. This entails signing a declaration saying just that, and confirmation through medical underwriting (that would most likely include a urine test) to ensure there is no trace of nicotine or cotinine (a nicotine byproduct)  in your system. At that time, the insurance company would also need a confirmation that there has not been an adverse change in your health.

This stringent testing and investigation is meant to prove to insurers your commitment to quitting smoking. Insurance providers want to make sure you stop smoking for good, not because they are concerned about your health or gum line, but because they want to avoid the risk of you starting the habit again and thus subjecting your body to more life-threatening medical conditions. The uncomfortable truth is that cigarette smoking can lead to a premature death for many Canadian adults, which makes the venture of insuring your life that much riskier.

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Other factors which affect life insurance for smokers

Vaping

Vapes and electronic cigarettes, as well as the flavoured tobacco products used in these  devices, are usually considered the same as smoking. Insurance providers, like BMO, take into account the health effects of vaping, as well as unknowns like how some of the carcinogens found in vaping liquid (lead, formaldehyde) have long term effects on e-cigarette users. 

While classification for vapers may change in the future once providers have their hands on more research around its effect on long-term health, you will still find yourself paying higher premiums today depending on the carrier you choose.

Marijuana and cannabis 

Marijuana smoking is another subject that is often conflated with its nicotine counterpart. With recreational marijuana usage legalized in Canada, the classification of cannabis smokers has changed. Once upon a time, if you were a recreational marijuana smoker, you would be considered a smoker in the eyes of your insurance provider. 

While that is no longer the case, as a casual marijuana user you may still be asked exactly how much marijuana you are consuming. Depending on the specific insurance company, heavy cannabis use may still be classified with smoker ratings. However if you mix marijuana with tobacco, then even a single recreational usage in 12 months would classify you as a smoker. 

Read more: Legal marijuana and life insurance: What’s changed?

life insurance smokers vs non smokers

Can I get preferred rates as a smoker?

There is some silver lining for the smokers amongst us. Most insurance companies offer preferred rates, or better than regular health rates, to individuals that demonstrate better than standard health metrics. Such preferred rates are available both to smokers as well as non-smokers. As you would expect, non smoking preferred rates are substantially better than preferred pricing offered to smokers. Nonetheless, if you are able to get preferred pricing while being a smoker, it will save you a lot of money over the term of your life insurance.

Preferred rate thresholds for smokers vary by company. Some companies may have easier norms for blood pressure, cholesterol or even driving habits than others. What is even more relevant is that some of the Canadian life insurance companies may not offer preferred pricing to those that smoke cigarettes but only be able to offer better pricing to cigar consumers. At PolicyAdvisor we work with 17 of the best life insurance companies in Canada and can guide you to make the right choice.

How to buy life insurance as a smoker

Your best bet for finding the best life insurance company for smokers is speaking with an experienced insurance broker. Our brokers have experience pairing smokers with insurance providers who work well with cigarette smokers and offer the best rates for those searching for term life insurance. We work with Canada’s best life insurance companies and find you the right quote for your circumstances and budget. Schedule a call or contact PolicyAdvisor.com today.

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