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Am I Permitted to Make a Change in My Term Insurance Smoking Status?

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Am I Permitted to Make a Change in My Term Insurance Smoking Status?
December 05, 2023

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A term insurance plan provides financial security to your loved ones when they need it most. These cost-effective life insurance plans offer a substantial payout to your beneficiary if anything happens to you during the policy term. The amount empowers your loved ones to maintain their standard of living, pay off debts, and fulfil future financial goals. 

How Smoking Impacts Term Insurance Premiums?

Term policies are known for their low premiums and high coverage. However, your habits can impact your premium. Insurance companies categorise individuals into two broad categories - smokers and non-smokers. Individuals who consume tobacco and nicotine in any form fall under the category of smokers. Since these individuals have a higher risk of developing life-threatening diseases, insurance companies charge them higher term insurance premiums.

What Happens If I Start Smoking After Buying Term Insurance?

Insurance companies understand that few individuals may become smokers after purchasing a policy. If you pick up the habit, honesty is the best policy. Contact your insurance company to inform them about the change. Remember, the insurance company will investigate every claim request. If they uncover that you smoked during the investigation, it could impact your beneficiary’s payout. You usually do not have to pay more for your insurance if you start smoking after you purchase a policy.

What Happens If I Quit Smoking After Buying Term Insurance?

You may quit smoking after purchasing your term plan. Some insurance companies allow policyholders to apply for reconsideration as a non-smoker. However, they may put terms and conditions on the change. For example, an insurance company may require individuals to stop smoking for at least four years before reconsidering the policy premium. Once you become a non-smoker, your insurance company may offer discounted premium rates. Quitting will help you save your health and your financial well-being.

The Importance of Being Honest While Purchasing a Term Plan

Every insurance company expects applicants to be truthful. While completing your term insurance application form, you must be honest about your smoking status. Let’s understand why honesty is the best policy.

  • Ease Claim Settlements

    When your insurer discovers that you provided false information, they will cancel your policy and reject your beneficiary’s claim. Eventually, it could have disastrous financial implications for your loved ones.

  • Avoid Legal Troubles

    It is recommended that policyholders provide accurate and truthful information to the best of their ability. False or misleading information may result in policy cancellation, claim denial, and legal action.

  • Fulfil Your Ethical Responsibility

    Being honest is a legal and moral obligation. You have a responsibility to protect your loved ones and provide them with a financial safety net. Looking after them starts with being transparent and honest in your insurance application.

    Every responsible adult must includes term insurance in their financial plans. Term policies offer financial stability in uncertain times. However, your smoking status can impact your insurance premium. Always remain honest and transparent with your insurance provider. Inform them about changes in your smoking status to ensure your loved ones remain protected under your term plan. Failing to accurately report your status could lead to claim rejection and other legal ramifications. Remember, smoking harms your health and your finances. Try to kick the habit to save your health and term insurance premiums.

Related Article: 

ARN - ED/11/23/6341  

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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