Term insurance is one of the most popular types of life insurance policies. When comparing the different life insurance products, term insurance has the lowest premium and is highly cost-effective. This is why many people prefer buying term insurance over other life insurance policies.

With the growing competition among insurance companies, you can purchase a term plan with premiums as low as Rs. 400 per month. But you must remember that the premium for the policy you buy entirely depends on various factors like age, health status, lifestyle habits, etc.

Why do smokers pay a higher premium than non-smokers?

Generally, the insurance companies calculate the premium based on the details provided by the policy applicant’s details. For example, an applicant who works in a high-risk environment like a construction site or a minefield may have to pay a higher premium than someone who has a relatively low-risk job like a banker or a teacher for the same policy.

Similarly, the insurance companies charge a higher premium for those who have the habit of smoking or consume alcohol. A critical reason smokers attract higher premiums on term insurance policies is that they are at the highest risk of suffering from various life-threatening illnesses that can have fatal consequences.

Various research has proved that several people lose their lives every year due to smoking or smoking-related illnesses like lung cancer, heart attack, kidney failure, etc. Besides, regular tobacco smoking increases the risk of stroke, bronchitis, tuberculosis, infertility, etc. So, from the insurance company’s perspective, providing life cover to such individuals is a significant risk. The chances of a claim for such a person are much higher than non-smokers.

To compensate for the high risk they take in providing life cover to smokers, insurance companies charge a higher premium. So, if you have the habit of smoking, you will need to be ready to pay a higher premium.

Many people tend to hide or lie about their smoking habits in the application form. However, you must avoid such unethical practice as it can have severe consequences in the long run during claim settlement. When your family members file a claim, the insurance company will verify the cause of death and investigate the details provided in the application form.

If the cause of death is linked to your smoking habits, the insurer will consider it a breach or non-compliance of the policy terms and reject the claim application. This means your family will not receive any policy benefits. While your family is mourning your loss and is under emotional stress, the last thing you would want them to face is financial stress.

It is, therefore, vital that you honestly mention your smoking habits in your application. In such cases, although you may have to pay a higher premium, you can be assured that your family will not have to face claim rejection. They will get the sum assured, which they can use to cover their regular expenses even in your absence.