- Life insurance premium is directly proportional to your exposure to health risks
- Smoking harms almost every organ in the body
- Smoking increases risk of death
Life insurance premium is directly related to mortality. After all, it is a risk that the insurer bears while providing coverage to the individual. Greater the exposure to health risks, higher would be the premium. As a result, factors that affect your ability to live longer have a direct bearing on your life insurance premium.
Your age and lifestyle are responsible for the premium you pay. A younger person is more likely to live longer than an older individual because of which the premium that the former pays is lower. A potentially hazardous lifestyle results in higher risk of death, thereby subjecting you to a higher premium.
Smoking is one such lifestyle choice that puts you at a health risk*. Tobacco smoke contains more than 4,000 chemicals, of which at least 250 are harmful, and more than 50 are carcinogenic. Tobacco kills up to half of its users, amounting to about 7 million people worldwide each year. Even second-hand smoking is responsible for increasing your chances of death, with an estimated 8,90,000 premature deaths per year. Second-hand smoke is the smoke that fills restaurants, offices or other enclosed spaces when people burn tobacco products such as cigarettes, bidis and water-pipes*.
Smoking affects almost every organ in the body** and increases the risk of cancer in at least 12 organs. Smoking causes about 90% of all lung cancer fatalities. It also increases the risk of coronary heart disease by a factor of 2 to 4. This increased risk to health caused by smoking directly increases your premium.
Anant Mishra, a 25-year-old engineer leads a healthy lifestyle, by restricting his diet and going to the gym every day. He hasn’t ever touched a cigarette, and opted for Exide Life Elite Term Plan for ₹1 crore life insurance cover, for a period of 30 years. His annual premium amounted to ₹7,561#.
His 25-year-old colleague, Ajay, took the same policy for the same coverage period. However, he’s a regular smoker, smoking at last 5 cigarettes a day. His premium amounted to ₹10,653##. There was a difference of ₹3092 between their annual premium amounts, brought about solely because of smoking as a lifestyle factor.
The increase in premium is not a fixed amount. It varies with the degree of the smoking habit. An existing smoker will have to pay more. A smoker who has quit, will also pay more than a non-smoker. This is in addition to the condition that s/he must not have smoked for a stipulated period of time. For example, someone having quit ‘yesterday’ does not qualify as a non-smoker.
Check with the insurer if there is a clause for reduction in premium in case certain lifestyle guidelines are followed. The increase in life insurance premium, as well as the increase in cost of procuring tobacco products, makes smoking a rather expensive habit. With premium reduction provisions, it can motivate smokers to save, not only on the health front, but also, financially.