As per a recent World Health Organization (WHO) report, there are approximately 120 million smokers in India that accounts for 12 per cent of the world’s total smoking population. The report further stated that each year, over 1 million people die in India due to consumption of tobacco.
Of the total Indian smoking population, 70 per cent of the adult males in India smoke while the number of adult female smokers is between 13 – 15 per cent. According to the Indian Heart Association (IHA), due to such a high population of tobacco consumers in India, the country accounts for 83 per cent of the world’s heart disease burden, despite having less than 20 per cent of the world’s total population.
Smoking and Life Insurance Premium
Moreover, smoking does not only affect your health, but it even affects the premium of your life insurance policy considerably. As per several life insurer’s underwriting rules, the policy premium of a customer’s life insurance is affected more by the smoking habits than the job profile. The life insurance premium for people with low risk job profiles like software engineers, bankers and marketing consultants is lower than professionals with high risk job profiles that include construction workers and prison officers. Just like job profiles, the life insurance companies split the consumers in two different segments i.e. smokers and non-smokers. Considering the underwriting rules and risk-profile, a smoker even with a relatively low risk job profile will still be paying more premium than a non-smoker in a high risk job.
A prominent reason why smoking has a much greater impact on the life insurance premium than a high risk profile job is proven detrimental effect of smoking on health of the people. As per various studies, while there are great chances that a high risk job profile may not still result in death but smoking has been the primary reason for a plethora of life-threatening diseases like lung cancer, strokes, heart ailments and tuberculosis for many decades. It’s like people with high fatality rates need to pay higher life insurance premium. People who smoke, on an average pay 50 per cent more premium for their life insurance policy in comparison to a non-smoker. On an average, the monthly life insurance premium of a smoker is approximately Rs. 650 to Rs. 850 more than a non-smoker, which comes around to Rs. 8,000 to Rs. 10,000 more per year.
Premium Calculation of Smokers
To evaluate the life insurance premium of smokers, the insurers inquire about the frequency of your tobacco usage in the last one month. This includes use of any tobacco based products including cigars, cigarettes or even chewing tobacco. Basis the information provided, the insurer decided if the policy seeker is a seasoned or an occasional smoker. Upon considering the other under writing rules, the insurer decides to charge loading (increase in premium) on the life insurance policy premium. If you are a smoker and wish to buy a life insurance policy, you must rightly disclose the same to the insurer without the fear of having to pay higher premium. Often, insurers ask the policy seekers to go for a medical test before issuing a life insurance policy. While it may be possible to lie verbally the insurer, it is practically impossible to cover up the traces of nicotine in the medical test even if you are an occasional smoker.
Secure Your Life at Affordable Premiums
Considering the fact that smoking is not a good habit yet it becomes an important part of many people’s lives, it is very important for people – at least who them who smoke – to make sure that they protect the future of their loved ones. And one of the most convenient and authentic way to financially protect the future of your loved ones in your absence is by investing in a term life insurance policy. However, several times it has been observed that smokers avoid taking a term life insurance sighting high premium as the reason for denial.
Fortunately, in order to cater to the problem of high life insurance premium for smokers, prominent life insurance company ICICI Prudential Life insurance has come with a smokers-specific term life insurance plan. Offered to the customers without a mandatory medical test, the POS -iProtect Smart plan of IPRU has an 80 per cent approval rate and the premiums are 30 per cent lower in comparison to other leading life insurers. While a salaried individual can buy this plan up to Rs. 1 Crore sum assured, a self-employed individual can buy the plan up to Rs. 50 Lakh sum assured. For a 35-year-old salaried individual, the plan can be bought for a monthly premium as low as Rs. 1,399 offering a cover up to the age of 65 years (maximum) with Rs. 1 Crore (maximum) sum assured.
Though there are some other term plans also available for the customers offered by prominent insurers which can be bought but after undergoing a mandatory medical test. Some of these plans include HDFC Life’s C2PP Life Option, Max Life Insurance’s Smart Term Plan, Tata AIA’s Maha Suraksha Supreme and Bajaj Allianz’s Smart Protect Goal.
Author : Santosh Agarwal,
Chief Business Officer,
Life Insurance,Policybazaar.com
