How Does Smoking and Drinking Affect the Cost of Term Insurance?

Written by : Knowledge Centre Team

2024-01-01

886 Views

Locate branch

Resume journey

Pay Premium

Table of Content

0 1

Can Alcoholics and Smokers Get Term I

0 2

How is Term Insurance Premium Calcula

0 3

What are the Impacts of Drinking and

0 4

Final Thoughts

But do you ever wonder how coverage for term life insurance for alcoholics and smokers differs? If you are confused with the same, this guide will help you figure out and make a thoughtful decision.

Also read: Can I Get a Life Insurance If I Smoke or Drink?

Can Alcoholics and Smokers Get Term Insurance?

Yes, term life insurance for alcoholics and smokers is offered by different insurance providers. However, as stated above, your ability to secure coverage and the cost of the premiums may be affected by your habits and health conditions.

For Alcoholics: If you have a history of alcoholism, you can still qualify for term insurance, but your insurer will thoroughly assess your health and alcohol consumption patterns. The severity of alcoholism, as well as any related health complications, may impact the underwriting process. Some insurance companies may classify individuals with a history of alcoholism as high-risk applicants, leading to higher premiums.

The Centre for Disease Control and Prevention (CDC) has established a specific threshold for alcohol consumption, defining any amount exceeding it as excessive drinking. In India, the prescribed permissible blood alcohol content is set at 0.03% per 100 ml of blood, equivalent to 30mg of alcohol per 100 ml of blood. This serves as the accepted standard for alcohol intake. So, remember, individuals consuming alcohol beyond this limit will be charged a higher premium as they pose a higher health risk.
For Smokers: Insurance companies consider smoking a significant risk factor due to its well-established links to various health issues. As a result, smokers are likely to face higher premiums of around 30-40% compared to non-smokers, reflecting the increased health risks associated with smoking. However, some insurers may offer different premium rates based on the frequency of smoking or the number of cigarettes smoked per day. Quitting smoking during the policy term may reduce premiums, depending on the insurer's policy.

How is Term Insurance Premium Calculated?

The premium on term insurance policy is calculated based on the following three factors:

Age: The premium on term insurance policy increases with an increase in the age of policyholders.
Gender: Men generally pay higher premiums than women for term insurance due to statistical evidence revealing their higher likelihood of accidents and associated risks.
Health History: Another pivotal factor impacting premiums is an individual's health history, which encompasses any prior or existing medical conditions or diseases. The premium of life insurance for alcoholics and smokers is way higher than for those who don't drink or smoke

What are the Impacts of Drinking and Smoking on Term Insurance Cost?

Inhaling nicotine through cigarettes does not just result in a puff of smoke thinning away; it also impacts your financial health, especially concerning insurance. Similar is the condition with excessive drinking.

Below listed are some of the impacts of buying life insurance in case of alcohol consumption or smoking habits:

Higher Premiums: The smoke from a cigarette or the clink of a glass of beer may seem normal at the moment, but it leaves a lasting effect on your insurance premiums. Smokers and drinkers often face the brunt of higher premium rates compared to their non-smoking and non-drinking counterparts. The reason behind this rise in premiums is just simple. These habits elevate the risk of developing hazardous health conditions, causing insurers to adjust premiums accordingly.
Exclusion of Coverage: Delving deeper into the fine print, some insurers may exercise caution by excluding coverage for specific conditions linked to smoking or drinking. For instance, the policy might not extend benefits for cancer if it arises due to smoking or liver disease caused by excessive alcohol consumption. Such exclusions can leave you vulnerable to uncovered medical expenses and financial strain.
Altered Death Benefit: While term life insurance promises a substantial death benefit, it can undergo a transformation when smoking or drinking enters the equation. Death benefit refers to the sum total paid out to beneficiaries in case of the death of the insured. It might be reduced if the policyholder passes away due to smoking-related or alcohol-related issues. This reduction reflects the insurer's response to the increased risk posed by these habits and impacts the financial security you intend to provide for your loved ones.

Under these circumstances, you can apply for Canara HSBC Life Insurance iSelect Smart360 Term Plan. This term insurance plan provides extensive coverage to the policyholder at an affordable premium. It offers spouse cover to help your family sustain even after you.

Final Thoughts

Reducing your term insurance premiums, even if you consume alcohol, is indeed possible with strategic planning and informed decision-making. Starting early and purchasing health insurance at a young age allows you to benefit from lower premiums, as your chances of developing medical conditions are relatively lower. Additionally, avoiding unnecessary add-ons and carefully comparing term insurance plans online can help you find the most cost-effective policy without compromising on essential coverage.

Remember, the path to affordable term insurance lies in proactive choices and prudent selection of the right policy. You must try to stop these habits, as it not only helps you save on your health but also, the life insurance for recovering alcoholics is also quite affordable.

FAQs

If you start smoking after getting a term insurance plan, you don't have to inform the insurer compulsorily. However, it is advisable. If you disclose the changes, the insurer may let you keep the policy, but your premium could increase based on your situation.

An applicant for a term insurance policy is usually categorised as a smoker if they consumed tobacco in any form in the last 12 months. Hence, they are obliged to pay a higher premium than non-smokers.

Past smoking history is unlikely to affect the premium for an existing term insurance plan if the person is currently a non-smoker. However, when buying a new plan, the premium of life insurance for recovering alcoholics may vary based on the specific policy. Disclosing your complete health history is essential to determine the premium accurately.