Personal Finance

Smoking comes with a high premium

Santosh Agarwal | | Updated on: Jun 30, 2019
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Insurers don’t differentiate between occasional and regular smokers

Out of the over 10 million tobacco-related deaths that happen globally every year, India alone accounts for a one-sixth.

As per a recent survey, there are about 120 million smokers in India, which translates into around 12 per cent of the world’s smokers. Men account for 52 per cent of the smokers and women 34 per cent.

Tobacco, for long, has been associated with rising incidents of life-threatening diseases, including lung cancer and tuberculosis, and is thus linked to higher insurance premium on both life and health policies.

Insurers in India use specific terms and conditions to classify you as a smoker or a non-smoker. According to insurance firms, being a smoker means use of cigarettes, cigars or chewing tobacco. Some even classify those who use nicotine patches, consume gum or any other form of nicotine, as smokers.

Heavy impact on finances

Most importantly, insurance companies do not usually differentiate between an occasional and a regular smoker. Apart from affecting your health, smoking increases healthcare expenses and your health and life insurance premiums.

The policy premium of a smoker is much higher than that of a non-smoker as the chances of early death are comparatively higher for smokers than non-smokers.

While buying a term insurance, it is important to disclose your smoking habits. In case the customer does not disclose this fact, and while making a claim the insurer finds out that the death happened due to smoking, the firm has the right to reject the claim. This is a major reason why life insurance companies charge higher premiums for smokers.

Just like life insurance, the premium for a health insurance policy is based on various factors, including the plan category, age, location and use of tobacco. Most insurers factor in tobacco use to increase the policy premium.

Insurance companies can charge smokers up to 50 per cent more on the policy premium than non-smokers due to the risks involved with respect to the health of the smoker.

Insurers can even ask the policy seekers (smokers) to undergo medical check-ups.

However, anyone smoking more than 20 cigarettes a day is usually not issued a health insurance policy, and even if insurers issue one, the premium will be significantly high and the policy will come with numerous terms and conditions.

The writer is Chief Business Officer, Life Insurance at

Published on June 30, 2019

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