Smoking May Cost More Than You Know
By Teresa Ambord
You've heard all the arguments about what smoking does to your body, and you're still smoking. If you don't believe your doctor or your family, have you ever considered what smoking has done to your insurance rates? When it comes to life insurance, smokers really get soaked, but they may also miss out on discounts on auto insurance and homeowners insurance.
Life insurance companies want their customers to be in good health for obvious reasons. They invest countless dollars in finding out what constitutes good health, and their conclusions are that smokers are much more likely to die early. No surprise there, right? Bud do you know how a life insurance company defines a smoker? Here are three general categories by which customers are rated:
- The best rate is, no smoking in the past five years.
- "Normally healthy" means three years of non-use.
- Standard non-smokers have not smoked in a full year.
Then there are smokers. Smokers can expect to multiply the best rate by 300% for the same policy.
Here's an example from one online insurance company:
Facts: $100,000 policy, 20-year term, for a 35-year-old male in Connecticut.
- For a healthy non-smoker, the annual premium would be $95-117.
- For an otherwise healthy smoker, the rate jumps to $288-308.
If you think you can simply lie about your smoking habits, think again. Applicants claiming to be non-smokers will generally be checked more closely, most likely with a urine test. The Centers for Disease Control and Prevention say that it takes more than three days for cotinine (a primary element of nicotine) to leave your system. Even if you pass the test, if the insurance company suspects you are lying, they may do a little more probing with questions. If you should suffer an untimely death within two years of initiating the policy and post mortem tests prove you were a smoker, the insurer can deny the claim, leaving your beneficiaries high and dry. Even three years after the policy begins there is likely to be some investigation.
Homeowner's Insurance and Auto Insurance
Smoking causes one third of all house fires. Though not all residential insurers take this into consideration when quoting home insurance, you may be missing out on discounts available to smoke-free households.
How long has it been since you applied for new auto insurance? If the day comes that you need new insurance, you'll probably find out that even auto insurers are interested in whether or not you smoke. Many, if not most, will offer discounts to non-smokers. Some offer reduced rates to those who have been non-smokers for at least two years.
Here's the Good News
If hardcore smokers aren't bothered by the very high price of cigarettes, chances are they won't care about paying higher prices for life, homeowner's and auto insurance either. Even so, most smokers do want to live. Smoking causes 87 percent of all lung cancer cases, but smokers who quit can actually reverse all that damage over time. Ten years of not smoking reduces the risk of lung cancer by 50 percent. And after 15 years, a former smoker can have lungs as good as new.
Once the Smoke Clears, The Future Looks Brighter
Besides the enormous health benefits, if you quit smoking, you stand to save enormously when you combine the discounted insurance and high cost of daily packs of cigarettes that you won't be spending. That is, of course, if you are one of the lucky ones who quits before cancer or other disease takes over.
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