Term Life Insurance for Smokers - 7 Critical Facts

What is It?

A Term life policy is insurance without the complicated bells and whistles that often accompany whole and universal life insurance.  Term life insurance covers you for period of time in the event of your death.  For example, a $100,000 10 year life insurance policy covers you for ten years.  If you die during the 10 year policy term, your beneficiaries (typically family members) receive $100,000.  In most cases, this is tax free to your beneficiaries.

Why do you Need It?

If a family member relies on your income, then you need term life insurance.  Term life does not benefit you but protects your loved ones in the event of your death.

Smoking and Term Life Insurance

If you are a smoker the first consequence is higher rates than a non-smoker.  The rates can be up to three times as high as a non-smoker policy so the cost difference can be considerable.  Since 87 percent of lung cancer is traced to smoking, the increase in rate is not too surprising.

Typically, if you have used tobacco in the past year, you will be put in the smoker classification.  It depends on the insurance company as some will consider usage as far back as 10 years on whether you qualify for the lower rate non-smoker classification.

Get Term Life Insurance Before You Need It

The number one mistake you can make as a smoker is too put off getting life insurance.  It's easy to do.  You convince yourself to get it once you stop smoking or lose weight or maybe even both.  Remember, if someone depends on your income other than you, like your wife, parent or child, you need life insurance to protect them in the event of your death.

Honesty Is Your Best Policy

It can be tempting to lie on your application and check the non-smoker box.  It really seems harmless, too.  Right?, not really.  See, even if you lie and the insurance company approves your policy, your beneficiaries may not receive the money even after you die.  Insurance companies typically investigate before issuing settlements.  If they were to find you smoked from old medical records or some other source, it is possible your policy can be revoked for lying.  It's just not worth it.  Here you pay your premiums for years and then a lie on your application unravels everything.  The bottom line is honesty is your best policy.  Being honest on your application will ensure your beneficiaries get the settlement, which is the reason you are getting the policy in the first place.

Don't Let it Lapse

This is a sad but true story.  A friend of mine was approved for a life insurance policy and paid the premiums for many years.  He let his health slide and started smoking more and more.  Unfortunately, he missed a payment and the insurance company canceled his policy.  In order to re-instate the policy, he had to take a physical examination which he could never pass with his current health.  He died without life insurance approximately two months after the cancellation.  Sadly, his wife received no life insurance benefits.

So needless to say, if you get life insurance, don't let it lapse.  The risk is too high.  It is one of the few times I recommend paying annually, semi-annually or having the payment automatically debited from your bank account.  The easier you make the payment process the less chance for error and cancellation.

Get The Motivation Now

In closing, if you smoke and have been considering term life insurance, now is the time to get it.  It is an easy thing to put off but getting a term life policy will provide a tremendous amount of piece of mind to your loved ones when they need it most.