Non-smokers generally pay less than smokers for life insurance. Learn what factors contribute to the cost of life insurance.
Updated:
Apr 13, 2024
Edited by
Ryan Lasker
Ryan Lasker
Imagine that you’re a life insurance underwriter, and you’re analyzing the health risk of two individuals: Their ages, medical histories and requested coverage amounts are nearly identical, but one is a smoker. Which individual has a lower health risk?
Non-smokers generally benefit from lower rates on life insurance policies compared to those who use tobacco or nicotine products because their lifespans are statistically longer. As such, they’re in a better position to be qualified for the best life insurance rates.
We at the MarketWatch Guides team have examined the factors a non-smoker should consider when shopping for life insurance products, including the different types of life insurance available, how much coverage you might need and, generally, how life insurance works. For those who are still tobacco users, we’ve included information on how life insurance for smokers may become cheaper after quitting smoking and other forms of nicotine use.
Non-Smoker Life Insurance Benefits
In general, non-smoker rates on life insurance are lower than rates for smokers. Additionally, non-smokers are more likely to be accepted by more insurance companies and have access to a larger variety of policies and riders, allowing them to customize their coverage even further.
Non-smokers can more easily qualify for the cheapest life insurance when they qualify for discounts due to their healthy lifestyle habits, which may include exercise and no alcohol consumption. The application process for non-smokers is generally swifter than that of smokers because insurers are more willing to take on the risk of insuring someone who doesn’t smoke cigarettes or vape.
Quitting smoking can also positively affect your life insurance premiums. Quitting smoking can reduce your premiums over time because insurers consider you less risky than when you were a smoker. Also, quitting smoking can help you develop healthier lifestyle habits, which may lead to more affordable life insurance rates from your provider.
Coverage Considerations for Non-Smokers
Non-smokers can benefit from reduced, non-smoking rate premiums compared to their smoking counterparts. However, there are a lot of coverage considerations to consider when selecting the right policy for you and your family.
There are two main types of life insurance: term and permanent. Term life insurance provides protection for a set period, usually between 10 and 30 years, at a fixed premium rate. If the insured person dies during the period, then assigned beneficiaries receive a death benefit payout.
Permanent policies offer lifelong coverage as long as premium payments remain current. Upon the death of the insured person, loved ones who are assigned as beneficiaries receive a death benefit, just as in term life insurance. Policyholders can also withdraw or borrow against a portion of premiums paid into the policy’s cash value account.
Permanent life coverage comes in various forms, including whole life insurance, variable universal life insurance and indexed universal life insurance. Permanent plans are more expensive due to their lifelong duration and other factors.
The exact cost of coverage varies on factors such as age, health classifications (which consider lifestyle habits such as smoking), occupation, income level and other underwriting criteria established by insurers. Non-smokers may qualify for the best rates if they lead an active lifestyle. Those who haven’t used tobacco products within 12 months of application submission are generally treated as non-smokers.
In brief, term plans offer lower premiums with limited flexibility, while permanent plans are more expensive but offer greater flexibility.
Understanding Health Classifications
Health classifications are a critical component of the process insurance companies use to make decisions about whom they’ll approve for life insurance. Insurance companies assign customers into one of four categories according to criteria that include age, weight, lifestyle habits and pre-existing health issues.
For instance, those under 30 tend to qualify for preferred rates. However, people in that age range who are overweight may be charged higher premiums. Additionally, regular exercise and healthy eating can positively affect your classification and could lead to lower premiums.
Finding the Right Non-Smoker Life Insurance Policy
The right policy for you is not always the first one you evaluate. It’s important to compare the different types of policies available, request a few life insurance quotes and choose the plan that meets your needs and budget.
When shopping for a life insurance policy as a non-smoker, the first and biggest decision is whether to purchase term or permanent life insurance. You might then consider riders, which are policy add-ons that include an accidental death benefit or a long-term care benefit.
Term life insurance is often the most affordable option, with premiums fixed for a set period. Permanent life insurance coverage offers more flexibility because of their cash value accounts.
A fiduciary financial advisor can help you determine what type of coverage is in your best interest. From there, you can work with an insurance agent to find the best deal for the coverage you want. Buying life insurance involves important and potentially costly decisions, so having a trusted advisor in your corner is important.
Non-Smoker Life Insurance Application Process
Applying for life insurance as a non-smoker can be a straightforward process, but there are several important steps to consider. The first step is gathering all the necessary documents and information. These may include a valid driver’s license, Social Security number, proof of income and any additional paperwork required by your insurer.
The next step is likely undergoing a medical exam. Some insurers require applicants to undergo a medical exam that includes lab work, a urine sample and other comprehensive tests. It’s important to answer any questions honestly so that your insurer can accurately determine your health classification and premiums. Lying on your application can be considered life insurance fraud.
After submitting the paperwork, it may take up to four weeks for the insurer to review and decide on coverage amounts and premiums. During this time, you may be asked for additional documentation or clarifications about certain parts of your application. Once everything has been approved, you’ll receive a policy document outlining coverage details, including payment amounts and the names of your beneficiaries.
There may be fees associated with applying for a life insurance policy, such as administrative costs or processing fees. Make sure that all applicable fees have been paid in full before signing any contracts or agreements with the life insurance company.
Factors To Consider When Choosing a Policy
When selecting life insurance for a non-smoker, there are several factors to consider. First, it’s important to decide between a term life insurance policy and permanent insurance, including a whole life insurance policy. Term policies provide coverage for a specific period and typically have lower premiums than whole life policies. Whole life policies provide lifelong coverage and also come with the added benefit of cash value accumulation.
Universal life and variable life policies are also available to offer more flexibility in terms of premium payments, death benefits, and cash values. Additionally, you’ll need to determine how much coverage you need by looking at your current financial situation as well as any future expenses or goals that the policy might cover. Of course, with more benefits come higher premium costs.
When comparing costs among different types of policies, look at both the cost of premiums as well as the length of the term. Generally speaking, shorter terms will have lower premiums but may not cover all of your necessary expenses. Also, look for any additional riders or features that may be available on certain policies, such as disability income protection, accidental death benefits and living benefits.
Quitting Smoking and Life Insurance
According to the Centers for Disease Control (CDC), quitting smoking at any age comes with numerous health benefits. Life insurance companies tend to reward the behavior, too, in the form of lower premiums.
When you apply for life insurance, companies will typically ask about your smoking habits and whether you’ve used any tobacco products, or had nicotine use, in the last 12 months. If you answer yes, you’ll likely be considered a smoker. Keep in mind that cigar smokers, cigarette smokers, marijuana users and users of chewing tobacco or nicotine gum may all be considered smokers and therefore be subject to higher rates. Those who use tobacco-free vapes should ask potential insurance companies how non-tobacco products are treated.
The best life insurance companies will assess the risks of nicotine and tobacco use and may have a special medical exam requirement. However, if you’re smoke-free for at least one year, some insurers may offer reduced rates.
The Bottom Line
It’s important to note that not all insurers view quitting smoking in the same way. For instance, many insurers view vapes and e-cigarette users as smokers since there are still nicotine levels present in their systems from vaping products. Smoking the occasional cigar may classify you as a smoker. Medical marijuana use may also affect life insurance options.
It’s always best to check with an insurer before applying for non-smoker life insurance if you’re using these products or have recently quit smoking.
If you do decide that quitting smoking is right for you and would like to apply for non-smoker life insurance, there are certain steps that must be taken to qualify for these lower rates:
- Avoid nicotine products, including vaping and smoking-cessation products, for at least 12 months before application submission.
- Get a medical exam by a doctor before submitting your application, including a urine test, which may reveal the presence of cotinine, a substance that is left in the body after tobacco use.
- Provide accurate information on your health history and lifestyle habits on the application.
- Maintain good health habits after quitting, including exercising regularly and maintaining a healthy diet.
Taking these steps toward becoming a non-smoker and applying for life insurance soon after quitting can result in significant savings on premiums and peace of mind, knowing that your family will be provided with financial protection should anything happen.
Finally, it’s important to work with a trusted financial advisor when assessing your need for coverage. If you decide to move forward with shopping for life insurance, then it’s recommended that you request at least three quotes to ensure that you’re getting the fairest deal for the coverage you want.
Frequently Asked Questions About Non-Smoker Life Insurance
If you lie about smoking on your life insurance application, you’ll be classified as a smoker if your insurer finds out. Lying could void your policy and increase your premiums.
Smokers can get life insurance, but they should expect to pay higher rates than non-smokers. This is because tobacco use is a proven health risk and affects life expectancy.
Life insurance companies generally don’t consider people to be smokers if they haven’t smoked for a year. The time to be nicotine-free varies by company.
Ryan Lasker is a financial writer and editor with bylines in Morning Brew, The Motley Fool, and several more. As a certified public accountant, he leverages his technical expertise in personal finance and tax to fuel his passion for teaching financial literacy. When he’s not writing, editing or working in a spreadsheet, he’s biking the D.C. trails or reading.