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When it comes to your life insurance policy and being a smoker, there’s only one two consistencies between varying insurance companies:
- If you lied on your application, your policy will either be rescinded or your death benefits will be drastically reduced; and
- Rates for smokers are significantly higher than they are for non-smokers
Below are a few common questions and answers on this topic to help guide you, but it is always recommended to discuss this with your insurer, or a life insurance specialist, to obtain accurate information pertaining to your exact situation.
Q: How does an insurance company classify you as a smoker?
A: Typically, any life insurance application will ask you, “Have you used a tobacco product within the last 12 months?” and it will refer to cigarettes, cigars, chewing tobacco, or even nicotine patches. Unfortunately, there isn’t much differentiation between a cigarette every now and then with drinks, and a pack-a-day. If you have any health issues due to your smoking, your premiums will be even higher.
Q: What happens if I lie on my application and state that I am a non-smoker?
A: Unfortunately, this is in fact considered to be insurance fraud and it can render some fairly serious consequences. For instance, if you die, and it is discovered that you were a smoker at the time of your application or started smoking within the probationary period (typically 2 years), the claim can be refused completely, or death benefits paid will only equal the total amount in premiums paid, minus the difference you should have been paying as a smoker.
Q: What if I quit smoking after obtaining a smoker policy?
A: If you decide to quit smoking, you can ask your insurer to reclassify you as a non-smoker and lower your rates. Usually, you have to abide by a time-period in which you have been smoke-free; the standard of which is 12 months. Each insurer has different rules for how you obtain reclassification that you must adhere to.
Q: What if I apply as a non-smoker, but then later decide to start smoking?
A: Most of the time, the rules for the policy you obtain and the rates that you pay only pertain to the time of the application and the probationary period (typically 2 years). If you start smoking after this time, your policy is usually safe. However, this is where it’s important to read the fine print of your policy, as your insurer might have included a clause for such a circumstance. Different insurers have different rules, and some dictate in their contracts that you must contact them and switch to a smoker policy, or risk having your policy rescinded later.
The most important thing to keep in mind is to always check with your insurance provider & ensure you are honest towards any current or future policies you may be involved in. You can click here to visit the Suncorp website & learn more about their life insurance policies rules & regulations.