Life Insurance for Smokers
Life insurance is important for all Australians, but for smokers who may have a higher chance of death due to lung cancer and other diseases, life insurance is arguably even more important.
Despite the increased risks that many smokers face, the majority of insurers in Australia are still happy to provide life insurance for smokers.
Although the life insurance companies are happy to offer cover, the premiums for smokers will be higher due to their heightened risk of serious illness and premature death.
Smoking rates will apply to any life insurance policy where the insured person has smoked within the last twelve months. Even if you have quit smoking, you must not have smoked at all for at least twelve months before the insurer will offer non-smoker rates.
Being honest on your insurance application
Depending on your age, life insurance for smokers can be considerably more expensive than for non-smokers. For this reason it may be tempting to lie on your insurance application, especially if you are a social smoker and just have a few on the weekend.
Lying about your smoking status on a life insurance application is classed as a breach of your duty of disclosure. If you make a claim on your policy and tests or other evidence show that you provided false information regarding your smoking status, your claim may be refused, leaving your family and loved ones without any financial protection.
Reduced premiums once you quit
The good news for smokers is that once you quit the smokes most insurers will be happy to review your cover and offer standard non-smoker rates.
Before the life insurance company will consider lower rates you will have to refrain from smoking for a period of twelve months, and sign a declaration confirming that this is the case.
Some insurers will then make you wait until your next renewal before reducing your life insurance premiums, whilst others can adjust your premium at any stage during the policy period.
Shopping around
When taking out life insurance for smokers it certainly pays to shop around, as different insurance companies will have different premium rates for smokers, and you may find that one company could be a lot cheaper than the next.
How smoking affects other forms of life insurance
It’s not only term life insurance that will be affected by your smoking status. Other types of life insurance such as income protection, TPD and trauma insurance will also attract higher premiums for smokers.
The most important part is getting the right cover in place, and thankfully almost all life insurance companies still offer each of these covers even for heavy smokers.
Obtaining life insurance for smokers
Just because you’re a smoker doesn’t mean you have to live without life insurance. Just be honest with the insurance company and shop around to find the best value cover for your needs.
Most Australians accept that their smoking does make them more vulnerable to cancer and serious illness, so if you cannot quit for your family’s sake, at least take out adequate life insurance to ensure they will be looked after if something happens to you.