Smoking is a habit that comes with numerous health risks. In India alone, tobacco use accounts for almost 1.35 million deaths every year. It’s no surprise, then, that insurers classify smokers as high-risk individuals and offer them separate term plans. If you’re a smoker, you might be wondering if it’s possible to change your smoking status in your term insurance policy. Let’s explore this topic further.
Who is considered a smoker?
When you purchase an online term plan, the insurer will typically ask you three questions to determine if you are a smoker:
- Do you consume nicotine and/or tobacco products?
- Have you used a tobacco product in the past four years?
- Have you ever consumed a tobacco product?
If your answer to any of these questions is yes, the insurer classifies you as a smoker. Depending on your overall health condition, smokers can be further categorised into preferred smokers, typical smokers, or table-rated smokers. Based on the categorisation insurers will fix the premiums as lower and higher looking at the associated risks.
Smoking and term plan
Now, let’s address the question of whether you can change your smoking status during the policy term.
However, before going further, let us understand what is term plan and what it entitles. A term plan is a type of life insurance that provides financial coverage for a set period in exchange for a premium we have to pay. So, the insurer will take into account all the risk factors of the insured before selling the term plan. Smoking is also considered a major hazard in terms of insurance policies.
What if I start smoking later?
If you have already purchased a term plan and become a smoker later on, you are not obligated to inform your insurer. However, it is always best to be honest to avoid potential issues in the future.
If you fail to inform your insurer of your change in smoking status and something happens during the policy term, it may appear as fraud. The insurance company might delay the payout until they can verify the claim request.
What happens if I lie about smoking?
It is crucial to provide accurate information to avoid the possibility of having your policy cancelled.
If it is discovered that you lied about your smoking habits, the insurance company will cancel your existing policy. This leaves your family without the financial protection that you intended to provide them with.
What happens if I quit smoking?
In India, most insurers do not allow a change in smoking status from smoker to non-smoker within an existing term insurance policy. If you quit smoking after purchasing a policy, it may not have any impact on your premium or policy terms.
You have two options if you quit smoking. You can choose to continue with your existing policy as it is. If you qualify as a non-smoker, you may enjoy the benefit of lower premiums.
However, since you are older than when you purchased your previous policy, the premium benefit might be negligible or even cancelled out. Some insurers may consider reducing your premium if you have not used tobacco products in the previous few years. But, it will still be higher than if you were a non-smoker from the beginning.
Securing your family’s financial future
Regardless of whether you are a smoker or a non-smoker, it is crucial to secure your family’s financial future with a term plan. These policies provide life coverage, ensuring that your family will be taken care of even if something were to happen to you.
When purchasing a policy, it is important to be honest about your lifestyle habits and medical conditions. Your insurer will provide policy terms and conditions based on the information you provide. If they find out that you knowingly provided false information, they may cancel your policy and potentially file an insurance fraud complaint against you.
Remember, honesty is the best policy when it comes to term insurance. By providing accurate information and understanding the consequences of smoking on your policy, you can make informed decisions that will protect your loved ones in the long run.
Conclusion
In conclusion, most insurers do not allow mid-term changes from smoker to non-smoker plans in term insurance. However, term plans have limited continuity benefits, so buying a new plan is just as good as keeping the old one. Keep in mind that rates for the new plan will be applicable based on your current age.
Taking charge of your financial future involves making wise decisions, and one such decision is purchasing a term insurance plan. Understanding the impact of your smoking status on your policy is essential for effective financial planning. Although most insurers do not allow a change from smoker to non-smoker plans mid-term, there are options available if you quit smoking or are tobacco-free for an extended period.
As you navigate through life, consider how your choices today can shape your family’s financial security tomorrow. By being honest about your smoking habits and carefully considering the available options, you can make informed decisions that will provide lasting benefits for yourself and your loved ones.
