What If I Start Smoking After Taking Term Insurance In India

Have you ever found yourself in a situation where you were a non-smoker when you purchased your term insurance policy, and now worried about the impact of your recent smoking habit on that very policy? Well, it is a common concern that many individuals face because circumstances change over time.

So, in this blog, we will help you find an answer to your query by discussing the impact of smoking habits on term plans for smokers. We will initially start with ‘Smoking and Its Impact on Term Insurance’.

Smoking and Its Impact on Term Insurance

When you're in the process of purchasing a term plan for smokers, it's always recommended to be transparent about your smoking habit, even if it's occasional. The application form always includes inquiry about smoking, and it's highly important to provide an honest response.

When you declare your habits and health status in the proposal form of a term plan for smokers, the insurance provider relies on that information and provides coverage accordingly.  If you fail to disclose any related information, the insurance company holds the right to reject your claim based on the facts presented.

Insurers can also take measures to identify smokers, and this can include conducting medical tests. Notably, the premium amounts for term insurance plans may vary between smokers and non-smokers, reflecting the increased risk associated with smoking. Therefore, being transparent about your smoking habits ensures that the premium you pay reflects your risk profile accurately.

Who is Considered a Smoker?

When you're purchasing a term insurance plan online, your insurance company will ask you three crucial questions to identify if you are a smoker:

• Do you use nicotine or tobacco products?
• Have you ever consumed a tobacco product?
• Have you used any tobacco products in the past four years?

If you answer "Yes" to any of these questions, the insurer will categorise you as a smoker. And, within the smoker category, there are different sub-classes based on your health status:

• Preferred Smoker: These individuals smoke but are in good health without any significant issues. They enjoy relatively lower premiums for their term insurance plans.

• Typical Smoker: Typical Smokers are smokers with minor health issues. They may have to pay higher premiums in comparison to preferred smokers.

• Table-rated Smoker: People who smoke and have noticeable health issues are placed in this group. Insurers often charge higher premiums for this category due to the increased risk.

What if I Start Smoking Later?

Term insurance plans are generally long-term commitments. It is possible that when you initially bought the policy, you were a non-smoker, but circumstances might change, and you may develop the smoking habit later on. In such a scenario, it is important to understand how this might impact your term insurance coverage and what steps you should take.

In life insurance plans, the disclosure of all relevant information is essential at the time of purchasing the policy. If your smoking habits change after buying the plan, it is advisable to inform the insurer. This proactive approach is necessary, especially in case of potential medical complications arising from smoking that could impact your coverage.

Please note that, when you inform your insurance provider about the change in your smoking habits, they may choose to continue your coverage without any alterations or could increase the premium based on their terms and conditions.

What Happens if I Quit Smoking?

In India, most insurance companies do not permit a change in your term insurance status from smoking to non-smoking. If you decide to quit smoking, it is unlikely to have an immediate impact on your premium or term plan for smokers policy.  However, you will have two options: you can either continue with your existing plan as it is, or after quitting smoking for a certain period, you can apply for a new term insurance plan as a non-smoker.

NOTE: Most life insurance companies require you to be tobacco and nicotine-free for a minimum of 2 years

If you choose the second option, make sure you are honest about your past smoking habits and specify how long you have been tobacco-free. Moreover, qualifying as a non-smoker could potentially lead to lower premiums. However, please keep in mind that since you are older than when you purchased your previous term insurance policy, the premium benefit might be minimal or even negligible.

What if I Lied?

If you lied about your smoking habit at the time of purchasing the term insurance policy, and the life insurance company fails to detect nicotine during the health examination, it can lead to complications during the claim process. This situation might provide grounds for the insurance company to deny the claim. And, they even have the right to cancel your existing policy. So, it’s always advisable to be honest about your habits at the time of buying an insurance policy. 

Conclusion

Transparency is crucial when buying a term insurance policy for smokers. Accurately disclosing your smoking habits on the proposal form guarantees that your coverage matches your risk profile and prevents any future claims from being compromised. Remember, a truthful approach is the foundation for a secure and reliable term insurance plan, safeguarding both your financial future and peace of mind.