Tobacco Use Impact On Life Insurance!

I am always surprised by the number of cigarette smokers who inquire about life insurance and when they find out what the cost is, they suddenly lose all interest. The difference in cost is likely no where near what they are spending on the habit, but they aren’t going to give up the habit, so……..

Just a few examples of the difference in cost using perfectly healthy 45 and 55 year old men. Assuming they are both looking for $500,000 of 20 year term.

1. For non smokers the best annual rate for the 45 year old is $615.00 and for the 55 year old it is $1500.00. Man, they really don’t cut us old guys much slack.
2. If they both smoke cigarettes, the best annual rate for the 45 year old is $2010.00 and for the old guy it is $4440.00.

Sooo, nearly three times as much if you smoke. Life insurance underwriters are all too familiar with the health risks associated with smoking. Heart disease and cancer top the long list of health issues that are either directly caused by smoking or are made worse by smoking. In a post not too long ago I cited a study that showed that smoking didn’t seem to have any impact on whether a man got prostate cancer. But for those men who did have prostate cancer, the men who smoked were three times more likely to die from the cancer.

Then there are the other types of tobacco. Most companies are at least moderately forgiving of an occasional cigar. Occasional meaning, depending on the company, 4 a year, 1 a month, no more than 2 a month or something like that.

One company, Prudential, will allow cigar smoking without limitation and smokeless tobacco use at standard plus non smoking rates.  For our two guys up top, that would mean that if they applied with any company but Prudential they would pay the rates in #2. With Prudential, the 45 year old would pay $1115.00 and the old guy would pay $2960.00

Bottom line. Those that smoke know the risk. When they apply for life insurance they get to assume that part of the risk.