Life is unpredictable, and giving financial security to your loved ones is the concern of every individual. One of the best ways of doing so is investing in a term insurance policy. But if you are a smoker, you might have a few questions on how your smoking will impact your eligibility, premium rates, and coverage. This article will explain everything you want to know regarding term insurance for smokers in India, and direct you to make the correct decision.
Table of Contents
Understanding Term Insurance for Smokers in India
Term insurance is a type of policy that insures for a specific time frame. When the policyholder dies during the term, a death benefit goes to the nominee. Term insurance doesn’t carry any investment component like other policies, thereby qualifying as one of the most inexpensive ways to gain financial protection for your family.
However, insurance companies assess risk before writing a policy. Smokers are considered high-risk individuals as smoking has been linked to various diseases, such as lung cancer, heart disease, and respiratory problems. As they are of higher risk, smokers typically pay a greater premium compared to non-smokers.
Who is a Smoker in India?
Indian insurance companies categorize people as smokers based on tobacco consumption. You are considered a smoker if you consume:
- Cigarettes
- Bidis
- Hookah
- E-cigarettes
- Chewing tobacco (gutkha, khaini, zarda, etc.)
- Chewing gum or nicotine patches
Even occasional chewing tobacco or smoking makes you a smoker at the time of buying term insurance products. Almost all companies ask about your smoking history in the last 12 months to determine your risk profile.
How Smoking Affects Term Insurance Premiums in India
Since health risks for smokers are greater, insurers charge premiums at a higher price. That is why smoking affects term insurance:
1. Higher Premium Rates
A smoker’s term insurance premium is significantly higher than a non-smoker’s. Smokers pay premiums 30-50% more. For example:
- A 30-year-old Indian non-smoker can pay ₹10,000 annually for a term insurance with a ₹1 crore sum assured.
- The same policy-smoker of the same age will pay ₹15,000 or more for the same coverage.
2. Medical Tests May Be Necessary
A few Indian insurers mandate a medical examination for smokers before issuing the policy. The medical examination will determine the health of the applicant, the diseases prevailing at the moment, and the risks involved.
3. Reduced Cover Options
Certain insurance firms can offer reduced cover to smokers since their risk category is greater. Others may have stricter terms and conditions of claim settlement.
Why Indian Insurers Charge Smokers More
Risk of mortality is that Indian insurance companies keep in mind to decide on their rate as premium charges. Being victims to killer diseases, since it is probable with smokers, makes them vulnerable to the risk of availing of insurance claims. As insurance companies provide the advantage of accepting the risk by giving them higher premium payments upfront,
Although smokers will have to pay extra, they can avail a cheap term insurance policy by:
Comparing Multiple Policies: Different insurance companies offer different premiums rates for smokers. You compare term insurance policies of Indian insurers such as LIC, HDFC Life, ICICI Prudential, and Max Life and choose one with the highest cover at the lowest price.
Choose a Longer Policy Term Early: Younger applicants pay lower premium. Smoking, if you buy a long-term policy when you are in your 20s or at the start of your 30s, it will cost you less by fixing a lower premium.
Stay Healthy: Check-ups regularly, exercise regularly, and eat healthy can positively impact your premium. Some insurance companies offer discounts to smokers who get healthier.
Quit Smoking: If you quit smoking for some time (typically 12 months or longer), some insurers allow you to request reclassification as a non-smoker and lower your premium.
Myths About Term Insurance for Smokers in India
Myth 1: Smokers Cannot Use Term Insurance
This is untrue. Even if smokers need to pay a larger premium, they are still eligible for term insurance.
Myth 2: It Doesn’t Matter Whether You Smoke Occasionally
Even sporadic smoking is considered while calculating the risk. Always disclose your smoking history in all honesty to avoid claim rejection.
Myth 3: Premiums Do Not Rise Even If You Have Stopped Smoking
Certain insurance providers offer an option for the policyholder to apply again as a non-smoker when he/she stops smoking, reducing their premium rates.
How to Select the Ideal Term Insurance as a Smoker in India
While making the term insurance policy selection, keep an eye on these:
- Premium Cost – Compare rates and select that which suits your pocket.
- Coverage Amount – Choose an amount assured that ample enough for covering your family’s financial needs.
- Claim Settlement Ratio – Choose insurance companies with a high claim settlement ratio to make the claim settlement process easy.
- Other Advantages – Choose riders such as critical illness cover, accidental death benefit, or waiver of premium.
- Policy Versatility – Check whether the insurance company offers the option to switch over to a non-smoker policy after the individual stops smoking.
Top Selling Term Insurance Plans for Smokers in India
Some competitive term insurance plans for smokers are offered by some Indian insurers. A few of the best-selling plans are:
- LIC Tech Term Plan – A popular plan with an option to pay a premium in flexible terms.
- HDFC Life Click 2 Protect – Offers accidental death benefit cover and critical illness riders.
- ICICI Pru iProtect Smart – Offers premium waiver benefits and additional health riders.
- Max Life Smart Secure Plus Plan – Offers one of the highest claim settlement ratios.
- SBI Life eShield – Offers the option to select the payout option and increase cover benefits.
Conclusion:
Purchasing term insurance for smokers in India provides your family with financial security. While the premium might be a little more, the coverage it offers is worth the premium. By comparing different plans, leading a healthy lifestyle, and choosing lifestyle modification like quitting smoking, you can lower the premium of your term insurance and make it more useful.
Don’t let cigarettes discourage you from availing financial security for your loved ones. Start looking for term plans today and choose one that best fits you!
An author of DigitalGpoint, We have published more articles focused on blogging, business, lifestyle, digital marketing, social media, web design & development, e-commerce, finance, health, SEO, travel.
For any types of queries, contact us on digitalgpoint.webmail@gmail.com.
