Lower Life Insurance Rates for Tobacco Users
Many tobacco users think that life insurance costs are too high for them. Not true! Costs are coming down significantly for many tobacco users thanks to several big-name life insurance companies. The price drop affects people who smoke cigars, a pipe, a hookah, e-cigarettes, marijuana, or use any other type of smokeless tobacco. The cost for some tobacco users has dropped to the point that they can receive the same rate that non-smokers pay.
Why are rates for tobacco users coming down? Most people know that tobacco use does lead to many different diseases. There is a lot of science that indicates all tobacco is not healthy. That fact is not disputed. Some life insurance companies are taking a different approach to tobacco use and not treating all usage the same.
A significant factor that life insurance companies base their rates upon is experience. Several life insurance companies have over one-hundred years of experience at observing the claims of customers who use tobacco, and this is what many have determined. Not everyone using tobacco products deserve smoking rates. Most of the death claims that occur from tobacco use are from cigarette users. That is why you will see rates for cigarette smokers sometimes double the rate of non-smokers.
Insurers that will help you stop
Before we look further into the cost that is charged to other tobacco users, let’s look at a few smoking cessation programs that life insurance companies support. Mark Twain enjoyed smoking immensely. He once said, “giving up smoking is the easiest thing in the world, I know because I’ve done it thousands of times.” Smoking is an addictive habit. Life insurance companies recognize this, and they realize that there are many people trying to kick the habit. Here is how one insurer is trying to give smokers incentive to stop smoking. If you are a smoker who wants to quit, John Hancock Life Insurance is one of the only life insurance companies that is willing to offer direct help. John Hancock offers universal life insurance policies to smokers at a non-smoker rate. They will give this rate for three years. At the end of three years, customers in the program re-do a paramedical exam. If the customer states that they have quit smoking and the test shows that they have no nicotine in their system, they can continue to pay the non-smoker rates. If they have not stopped smoking, they can keep the life insurance policy. However, the rate will increase to the smoker rate.
Life insurance company rules do change. So, in most examples in this article, specific life insurance company names will not be used. There is too much of a chance that a specific insurer will change how they deal with tobacco users making this article less useful. By explaining how life insurance companies handle specific situations and giving an idea of how many companies at this time are following a particular practice, this information will be helpful for a long time. Life insurance companies are continually competing for a share of the consumer market. Rarely is there only one company offering a program. An exception to this is the example of John Hancock’s smoking cessation plan. Just in case you are concerned about policies changing once you have made a purchase, insurers cannot change the conditions of a life insurance policy after the policy is issued. That is why they call a policy an insurance contract. The only exception to this is if there is fraud in acquiring the life insurance policy. If your health or habits change, the policy will not change.
As of the date of this blog, there are three life insurance companies that are willing to offer non-smoker life insurance rates to a customer that has stopped smoking for at least twelve months and had no nicotine in their system. Many life insurance companies see smoking as a difficult habit to quit. So, only a few will consider giving smoker rates after only a year of quitting because they assume that there is more of a chance to start again. The number of life insurance companies that will offer non-smoker rates after two years does increase. As of now, there are five major insurers that will offer non-smoker rates to a person that has stopped smoking for at least twenty-four months. Most other insurers will offer non-smoker rates to former smokers after five years.
Cigar smokers can get non-smoker rates
Cigar smoking is a very popular form of tobacco use. There are a few life insurance companies that look at cigar smoking as no big deal. Several life insurance companies have many years of experience selling life insurance to cigar smokers. This is why they are offering cigar smokers good rates. Their logic is that cigar smokers do not keep the smoke in their body as long as cigarette smokers. Cigarette smoke is absorbed much easier through the lungs than the mouth (Gori, Benowitz & Lynch, 1986). The same is not true of cigar smoke. Nicotine in cigar smoke is much more readily absorbed through the mucous membranes of the mouth than is nicotine in cigarette smoke (Armitage & Turner, 1970). Life insurance companies have not been able to correlate the level of nicotine in the blood specifically to the frequency of use. However, if a cigar smoker does not have nicotine in their blood, the frequency of use is inconsequential to some life insurance companies. At this time, there are two major life insurers that will offer non-smoker rates to a cigar smoker if they can meet two requirements. First, they must declare the use of cigars on their application and second; they can have no nicotine in their blood. Also for these two insurers, the customer cannot declare that they smoke more than one cigar per week. Some occasional cigar smokers are concerned about nicotine showing up in their paramed exam results. A study published in the American Journal of Public Health states that for occasional cigar smokers, nicotine leaves the body after twenty-seven hours (Jarvis, Russell, Benowitz, & Feyerabend,1988). So, it would be advisable for occasional cigar smokers to not smoke for a few days before a paramed life insurance exam. It is important to note that this study mentioned was done on non-smokers and occasional smokers, not regular smokers (Jarvis, et al.,1988). A study done by the Nicotine and Tobacco Research Journal indicates that for regular smokers it will take at least six days of smoking abstinence to eliminate nicotine from the body (Ahijevych, Tyndale, Dhatt, Weed, & Browning, 2002)
With all of that said, there are three major life insurance companies that will defy that logic and offer life insurance to cigar smokers at non-smoker rates no matter how many cigars they smoke. And nicotine in the urine and blood test do not matter.
The natural question is why would a cigar smoker not apply to one of these three life insurance companies? The answer is overall rates of life insurance. There are circumstances where one of the other life insurance companies that are more selective may have better rates.
Other types of smoking
The other forms of smoking; pipe, e-cigarette, and hookah are all treated similarly. There are three major life insurance companies that will offer life insurance at a non-smoker rates to people who use these forms of smoking. These smokers can get non-smoker rates even if there is nicotine in their body. There are two exceptions now. One insurer will not offer coverage to hookah smokers, and there is another that will not offer coverage at all to e-cigarette users.
Nicotine gum and smokeless tobacco
There are three major life insurance companies that will offer users of nicotine gum and smokeless tobacco non-smoker rates. The presence of nicotine in the body does not affect the rates of the life insurance.
Marijuana use and life insurance
Even though marijuana has been around for many years offering life insurance to marijuana users is a newer practice for life insurance companies. The legalization of marijuana in some states has been a catalyst for life insurance companies to relax their rules of offering users’ coverage. At this point there are four major life insurance providers that will offer marijuana users coverage with some restrictions.
The key to getting life insurance as a marijuana smoker is the frequency of use. Most of the insurers use a loosely defined reference to frequency. Rare use is once a month. Light use is up to two times a month. Moderate use is once per week. High usage is considered several times a week or daily. High usage marijuana smokers will be declined coverage by most if not all life insurance companies.
Before I get more specific on cost, it may be helpful to highlight the pricing system that life insurance companies use. Health ratings are important because that is how the price of life insurance is set. Higher policy ratings are more desirable because they translate into a lower cost life insurance policy. All life insurance companies have a rating called standard issue. Depending on the insurer, there will be two or three ratings above the standard issue. It may be called preferred, preferred plus or super preferred. Life insurance companies use several different descriptions for the top rating issues; it is not a universal terminology. Below standard, there can be up to eight levels. These are called table ratings. For example, the first level below standard would be called a table one rating. Each table of one through eight increases the cost of the life insurance. There are other pricing methods used with life insurance policies. However, those go beyond the scope of this article.
One of the insurers that will offer marijuana smokers coverage will only do so if there is light use. A customer that is a light user and passes the drug screening can get non-smoker rates from this company. Another insurer will offer coverage up to mild use. However the best health rating they will offer is standard. The third company that will offer marijuana smokers coverage will offer light users coverage and depending upon other health conditions will offer their best health rating as a non-smoker. If a customer is a moderate user, that is up to once per week; there is only one company that will consider offering life insurance to them. Plus they will consider offering their best health rating depending upon other health conditions. The key to getting coverage from any of these life insurance companies is the customer must pass a drug screening test. One insurer will allow traces of the drug to be present. The other companies will not offer coverage unless the customer passes the drug screening. The drug which is in marijuana is called THC. It takes at least seven days for the body to eliminate THC and “complete elimination of a single dose may take up to 30 days” (Ashton, 2001).
It does not matter if the use is in a state that legalizes marijuana or not. However, any criminal arrest will affect the insurers’ determination of offering a life insurance policy. It does not matter if marijuana is used for medical use or not. Most of the time if marijuana is for medical use, the medical condition it is being used for will determine if a life insurance company will offer coverage.
The last and most important aspect to consider when applying for life insurance as a tobacco user is a candor. Usage must be disclosed up front. There are a lot of ways that life insurance companies will discover if a person applying for coverage uses tobacco. It may have been discussed with their doctor. If so, it will show up in the medical files. If a person applying for life insurance does not disclose the use of tobacco and the life insurance company discovers usage, there is a very strong probability that they will decline to offer any coverage. The life insurance company philosophy is that if an applicant does not tell the truth about one item what else are they not answering truthfully.
Applying for life insurance can be a confusing and time-consuming endeavor. It is important to remember the reason for getting life insurance. You are doing it because you love someone and you want to protect them.
Hopefully, this information will help you in communicating your application for life insurance. The more clearly you communicate the information concerning your health, the more likely you are at obtaining a favorable health rating and a lower cost. If I can help you with questions, please feel free to call, email or text. I will remind you that this is not intended to communicate medical health recommendations. My principal goal is to help you better communicate your health condition to a life insurance underwriter in hopes of getting a favorable life insurance policy.
By Van Richards
Van is the founder of Advice4LifeInsurance and Advice4Retirement. You can contact him at van@advice4lifeinsurance.com Follow on Twitter @VanRichards or Facebook at https://www.facebook.com/advice4lifeinsurance/ and https://www.facebook.com/Advice4Retirement/
Reference
Ahijevych, K. L., Tyndale, R. F., Dhatt, R. K., Weed, H. G., & Browning, K. K. (2002). Factors influencing cotinine half-life during smoking abstinence in African American and Caucasian women. Nicotine & Tobacco Research, 4(4), 423-431. doi:10.1080/1462220021000018452
Armitage, A. K., & Turner, D. M. (1970). Absorption of Nicotine in Cigarette and Cigar Smoke through the Oral Mucosa. Nature, 226(5252), 1231-1232. doi:10.1038/2261231a0
Ashton, C. H. (2001). Pharmacology and effects of cannabis: a brief review. The British Journal of Psychiatry, 178(2), 101-106. doi:10.1192/bjp.178.2.101
Gori, G. B., Benowitz, N. L., & Lynch, C. J. (1986). Mouth versus deep airways absorption of nicotine in cigarette smokers. Pharmacology Biochemistry and Behavior, 25(6), 1181-1184. doi:10.1016/0091-3057(86)90108-5
Jarvis, M. J., Russell, M. A., Benowitz, N. L., & Feyerabend, C. (1988). Elimination of cotinine from body fluids: implications for noninvasive measurement of tobacco smoke exposure. American Journal of Public Health, 78(6), 696-698. doi:10.2105/ajph.78.6.696
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