Life insurance is an important financial product designed to take care of your family or loved ones in the event of your demise due to natural causes, ailments, or accidents.
A life insurance policy is vital for all Canadians with family members or loved ones. However, the conditions are different for smokers.
Smoking is detrimental to your health over the long term. Insurance companies understand the health implications. Therefore, life insurance rates for smokers can be up to 200% higher than for a non-smoker.
If you apply for life insurance coverage, your insurance provider will ask questions to determine if you are a smoker or non-smoker. For most providers, smokers are all users of nicotine regardless of form.
The exact categorization rules depend on the insurance provider’s underwriting guidelines. However, most providers will classify you as a smoker if you:
- Smoke cigarettes, cigars, or marijuana
- Chew tobacco
- Use vapes and electronic cigarettes
- Use nicotine patches or gums
If you qualify as a smoker, you’ll need to carefully explore your options.
In this article
Which Life Insurance Policies for Smokers Are Best?
There are ten types of life insurance products for Canadians. However, only a handful of them are good bargains for smokers. The top three include the following:
Term Life Insurance
Term life insurance is a policy that offers life insurance for several years (usually 10, 15, or 20 years) or up until a specific age.
It pays out a death benefit if you die within the stipulated term in the contract. The policy is a good option for regular or heavy smokers who are already at risk of debilitating ailments in their later years. A term life insurance policy for smokers is often the more affordable option as it covers you for the specified time period, or up until a certain age. Another reason why this may be a better option is because a term policy does not come with the added perk of having cash value, like a whole life policy does, which ultimately increases the cost of premiums. Term life insurance policies come with more perks as well. Learn more about them here.
Permanent or Whole Life Insurance
These policies provide lifelong coverage, staying active for as long as you continue to pay your premium. However, the premiums are usually high for smokers. As mentioned in the section above, a whole life insurance policy has cash value, and the longer you are paying into the policy, the more cash you have to withdraw during your lifetime, and use how you wish. At the time of your passing however, whatever cash value you have remaining will not be issued to your beneficiary, but rather kept by the insurance company. Your family will receive the designated amount of your policy at the time of purchase.
Simplified Issue Life Insurance
These policies do not require a medical exam. The providers will still ask you to fill out a health questionnaire, but the underwriting guidelines mean that most applicants will qualify for coverage. It is especially important to be completely honest on these applications. Should an insurer discover that you were dishonest on an application, this would be considered as misrepresentation. Misrepresentation, can lead to a null in void of your policy, with no return on your premiums. The best course of action in this case is to quit smoking for 12 months, which will significantly lower your premiums.
How Do I Purchase Life Insurance as a Smoker?
Purchasing life insurance as a smoker can be done the same way as purchasing any other life insurance policy, be it as a non-smoker, or even someone with pre-existing conditions. Speaking to a broker is always advised as they will be able to compare side-by-side quotes for you. Shopping for insurance is time consuming and oftentimes confusing if you don’t understand insurance definitions and terminologies. For those who prefer an exclusively online experience, a digital product like this one, from Insurdinary, is a great option. Not only does this tool also compare multiple quotes for you, it comes with a self assessment tool to help you determine exactly how much insurance you should be purchasing based on your current financial situation.
The Impact of Smoking Frequency on Life Insurance
The impact of your smoking frequency on your life insurance policy will vary across providers. Some insurers will classify you as a smoker if you’ve used at least one cigarette over the last 12 months.
Others will classify you as a non-smoker if you smoke less than a specified number of cigars per month or per week. Thus, one of the most important metrics to pay attention to when evaluating insurance providers to use as a smoker is their level of leniency in this regard.
How Life Insurance Companies Confirm Your Smoking Habit
Most life insurance companies will confirm your smoking habit through a medical examination or requesting a report from your doctor. The underwriter might recommend a urine or blood test to confirm the presence of cotinine in your body.
Cotinine is a by-product of nicotine. It can stay in the body for up to a year. It can linger for more than a year in the body of older individuals and people with poor liver function.
In some cases, the insurance provider may not ask for confirmatory tests or reports. However, it doesn’t mean you can lie about your smoking habit. Lying on the insurance application will void your policy, and your beneficiaries will not receive anything upon your demise.
Can Second-hand Smoking Qualify You as a Smoker?
If you spend a lot of time among smokers, you may be worried about the impact on your life insurance. Keep in mind that cotinine will not show up in test results due to second-hand smoking. Therefore, you won’t need to buy life insurance for smokers.
However, the absence of cotinine in your system doesn’t make second-hand smoking any less dangerous. Second-hand smoke causes 800 deaths yearly in Canada.
Do Life Insurance Companies Treat Marijuana Smokers Differently?
Most insurance companies are more lenient with marijuana users overall. However, they often evaluate the use case during the underwriting process. They will ask the following questions:
- What type of cannabis do you use?
- How often do you use it?
- How much do you use per time?
- Is the usage recreational or medical?
If you smoke less than two joints per week, you may qualify for non-smoker rates.
The Cost of Life Insurance for Smokers
Insurance providers rank smokers as high-risk individuals. Therefore, you can expect your premium to be up to 200% higher than the average rate for non-smokers.
Smokers pay more for life insurance because smoking exposes you to a range of health risks. It can make you susceptible to several health complications. Insurers charge more because there’s a higher probability that they will pay out on the policy—typically sooner than normal.
Smoking can lead to heart and respiratory disease, as well as cancer. Tobacco-related disease leads to more deaths in Canada than car accidents. Also, middle-aged smokers are three times more likely to die from heart disease due to smoking. As smokers are at a greater risk of developing both heart disease and cancers, securing life insurance with those pre-existing conditions as well, can quadruple your premiums.
Quitting smoking before you turn 40 can decrease the risk of dying from smoking-related diseases by almost 90%.
The facts above show why insurance providers charge higher premiums for smokers.
When working out your rate, the insurance provider will look at the following factors:
- Your nicotine-consumption habits. Insurers will want to find out how many packs of cigarettes you smoke per week or month. They will also assess how you consume your nicotine. Do you use a nicotine patch or chew tobacco? Do you smoke cigars?
- The length of your smoking habit. To accurately assess your risk levels, life insurance underwriters will evaluate how long you’ve been smoking. An adult in their 50s who has been smoking for the last two decades will get a higher premium than one in the same age bracket who has only smoked for the last five years.
- How long since you quit smoking. Some insurers may classify you as a non-smoker if you haven’t consumed nicotine in any form over the last two years.
Can You Quit Smoking After Purchasing Life Insurance?
If you’ve not consumed nicotine over the last 12 months, you can discuss with your insurance provider about changing your status to a non-smoker. The insurance company will require a urine and blood test for cotinine before approving your request. They will also require medical examinations to confirm you’re still in good health.
Quitting smoking for a year can reduce your chances of developing heart disease by more than 50%. If you quit smoking for five to 15 years, the chances of developing lung cancer fall by more than 50%. Quitting smoking can also increase your life expectancy by up to 10 years if you quit at age 30.
Smoking After Purchasing Your Life Insurance
The insurance company cannot change your contract once it’s in effect. You’re only required to disclose your smoking habit when filing your application. If you pick up a smoking habit after the contract is in effect, you don’t need to disclose it to the insurance provider.
Insurance underwriting looks at the facts during the time of your application. As long as you were honest during the application, your actions afterward cannot void your policy or affect your premium.
How to Get Affordable Life Insurance as a Smoker?
You can lower your premium as a smoker by doing the following:
- Quit smoking. As discussed above, some insurance providers will categorize you as a non-smoker if you demonstrate abstinence from nicotine for at least 12 months. It’s the best way to lower your premium—and as an added benefit, you can improve your health.
- Shop around. Different insurers have different underwriting guidelines. Comparing rates across providers can help you find a more competitive premium.
- Reassess your policy. Did you buy your life insurance as a smoker? You can qualify for lower premiums if you’ve quit smoking years after purchasing the policy. Reach out to your insurance providers to discuss possible premium reductions. You can also talk to another insurer about taking over your policy. They may offer a more competitive price for coverage.
- Work with a qualified insurance broker or agent. These professionals understand the market. Therefore, they know providers and policies that best fit your needs and budget. They are also qualified enough to answer all questions you may have about life insurance plans in general.
Receive Professional Guidance for Smokers Life Insurance Today
Life insurance premiums are more expensive for smokers overall. The best way to get good value is to work with a qualified insurance advisor who can help you find the most affordable coverage from the best life insurance providers in Canada.
At Alliance Income Services Corp. (AIS), we have made a name as the company to trust for easy insurance applications for consumers of all age groups, regardless of their situation. We can help you find life insurance for smokers from some of the leading names in the industry, including:
- iA Financial Group
- Canada Protection Plan
- RBC Insurance
- Assumption Life
We are experts at helping you find the best policy for your needs in line with your budget. Fill out the contact form to receive quotes from multiple providers today.