What If a Policyholder Starts Smoking After Buying a Term Plan?

In India, adults over the age of 15 accounted for 267 million users of tobacco products in 2016. According to the World Health Organization, tobacco use results in approximately 1.35 million deaths annually in India caused by chronic conditions that tobacco leads to, such as cancer, cardiovascular disease, stroke, and lung disease.

Unsurprisingly, insurers consider smokers to be high-risk clients and offer specific term insurance plans tailored specifically to their needs because tobacco use can have detrimental effects on a person’s life.

Who Would Be Classified as a Smoker?

What is term insurance going to look out for? For your insurer to determine whether or not you are a smoker when you buy a term plan online, they will ask you the following three questions:

• Do you use nicotine and tobacco products in your daily routine?
• Have you used any product containing tobacco in the previous four years?
• Have you ever used a product that contained tobacco?

Your status as a smoker will be determined by your insurer based on whether or not you answered any of the questions with a yes. You could also be categorised according to these subgroups:

Preferred Smoker: Preferred smokers indulge in the habit despite being physically fit and free of other medical conditions. The premiums they pay for term plans are significantly lower when compared to other types. Don’t believe it? Find it out using a term insurance premium calculator.

The Average Smoker: Typical smokers are those who have health problems that are relatively small but persistent. They could be required to pay a higher premium than those favoured smokers.

Table-rated Smoker: This group includes people who smoke and who have additional health problems that are readily apparent. Insurers will typically charge higher premiums to those with higher risks to compensate for that risk.

What if I don’t begin smoking until much later?

If you have previously acquired a term plan and decided to start smoking later, you are exempt from the requirement that you notify your insurer. However, to avoid any problems in the future, it is always important, to be honest.

What are the Consequences of My Lying About Smoking?

Purchasing a term plan from an insurance provider, online or offline, constitutes entering into a legally binding contract. To avoid cancelling your insurance with the insurer, you should supply the correct information, as with any contract.

If you are dishonest about your smoking habits, and the insurance company discovers that you lied, then in that case, they will cancel the existing policy, leaving your family without the financial protection you hoped to give them.

What can I expect if I finally kick the habit?

In India, most insurance companies will not let you switch your term insurance plan status from smoking to non-smoking if you want to. If you give up smoking, your insurance premium or policy will likely change. You can keep your plan as it is or quit smoking for a few years and then apply for a new term plan as a non-smoker after that time period has passed. 

If you choose the second choice, you have to be completely forthright about your smoking history and give an accurate estimate of the amount of time that has passed since you quit using tobacco. If you demonstrate that you have never smoked, you may be eligible for premium concessions. * Standard T&C Apply

On the other hand, given that you are now older than you were when you acquired your previous insurance, the premium advantage may become null and void or be reduced to an insignificant amount. You may be eligible to ask your insurer to rethink your plan if you have not used tobacco products for several years and maintained a tobacco-free lifestyle. They may consider lowering your premium if you last used tobacco a while ago, but, likely, it will still be greater than it would have been if you had been a non-smoker from the start.

Whether or not you are a smoker, you must invest in a term plan to ensure your family’s financial well-being. You can use the term insurance premium calculator to get the right policy. These insurance policies offer life coverage, giving you peace of mind that your loved ones will be provided for if something unfortunate happens. If you want to buy insurance, you are responsible for telling the truth about your health and how you live your life. 

What is the term insurance provider going to do when they find out? The insurance providers will terminate your coverage if they discover that you have been dishonest on purpose. They may even make a formal complaint of insurance fraud against you if they come to that conclusion. Being trustworthy is the most effective strategy for ensuring the financial well-being of one’s family.