Most life insurance companies view smokers as a high-risk group. When you smoke, you are significantly increasing your risk of dying prematurely. That means that the insurance company is likely to have to pay out a death benefit much sooner than if you were a non-smoker. This increased risk is reflected in the higher premiums that smokers pay for life insurance.
So why do smokers pay high premiums on life insurance?
Insurance companies base premiums on the amount of risk they incur when they insure someone. There are several factors that insurance companies consider as contributing to that risk. Among those factors are occupation, lifestyle, and health history. Very high on the list of factors that increase the risk to the insurance company is whether the applicant is considered a smoker or not.
Smokers are considered high-risk because they’re more likely to die prematurely than non-smokers. Mortality tables indicate that smokers have a higher rate of mortality, which leads to a higher risk for insurance companies. This is why insurance providers charge higher premiums to insure smokers vs. non-smokers.
Fortunately, the number of people in Canada that smoke is a minority (1). According to the most recently published statistics by the Government of Canada, an estimated 10% of the population is categorized as smokers. An even smaller percentage of the population – 8% – is reported as daily smokers.
What counts as smoking?
‘Smoker’ or ‘non-smoker’ is a broad characterization. There are nuances such as vaping, cigar smoking, and cannabis smoking, and each insurance company has its own criteria to determine who will be considered a smoker or a non-smoker. When you apply to buy life insurance, the insurance company you select will have its own criteria for who it considers being smokers or non-smokers. For example, you may be considered a non-smoker if you have not had a cigarette in at least a year. However, most companies will rate you as a smoker if you have used products such as pipes, cigarettes, electronic cigarettes, vapes, smokeless tobacco, or even gum and patches in the last 12 months.
How will smoking affect your life insurance premium?
Life insurance for cigarette smokers carries higher monthly premiums because they’re at a higher risk of premature death. Smoking is one of the leading causes of premature death in Canada (2). According to Statistics Canada, smoking causes 230,000 deaths in the country each year (2). That means there’s a good chance the insurer will have to pay out a death benefit sooner than expected. In addition to the increased risk of premature death, smokers also tend to have more health problems than non-smokers. On average, 100 Canadians die of smoking-related illnesses such as cancers, cardiovascular diseases, and respiratory diseases each day. That means they’re more likely to make claims on their life insurance policies. So not only do insurers have to pay out death benefits sooner with smokers, but they also have to pay out more in claims overall.
Therefore, insurance companies have separate rates for each classification. When comparing rates, smokers can expect to pay 50% higher premiums for comparable life insurance coverage than non-smokers.
Non-smoking vs. smoking life insurance rates
Buying life insurance for smokers will carry higher premiums than all life insurance companies. Here are some examples of life insurance quotes that illustrate life insurance smoking rates vs. non-smoking rates.
Monthly Premium (Non-Smoker)
Monthly Premium (Smoker)
Methodology: The chart above reflects average life insurance premiums for smokers and non-smokers in a standard health classification, buying a $100,000 term life insurance policy with a 10-year length. Prices in the table are determined by internal actuarial rate tables for Canada’s top life insurance carriers that offer policies through the WizLife marketplace.
It is safe to say that if you want affordable life insurance, cigarette smoking will not be conducive to getting the best rates.
What happens to your insurance premiums if you quit smoking?
There is great news for those that quit smoking. Some life insurance companies will lower the rate on your life insurance policy after being smoke-free for a certain period of time. For example, if you have been tobacco-free for three consecutive years, some life insurance companies in Canada will consider you a non-smoker. At this point, you could request your insurance provider for rate reconsideration and you may qualify for significantly better life insurance rates.
How do insurance companies find out if you smoke?
Life insurance providers always have a health questionnaire as part of the process of applying to buy a life insurance policy. The most common way for a life insurance company to know if you smoke is when you truthfully answer the questionnaire.
Additionally, some insurance companies may require you to take a medical exam, where you will need to provide blood and urine samples. The medical exam will be looking for cotinine and anabasine. Both substances are found in tobacco. If you test positive for either substance, the insurance company will consider you a smoker for the purpose of insurance.
Why is term insurance often better than permanent insurance?
Term insurance is the most popular type of life insurance issued. It is preferred because it generally gives you the highest death benefit for the amount of premium you pay. Additionally, term life insurance policies are considerably more flexible and customizable. You can ladder policies to get the coverage you need and save money for the same coverage compared to permanent life insurance.
You can buy a term policy to fill a specific financial protection need for a limited time, then be done with it. For example, if you start a business and you want to make sure that for the first five years, you have a large death benefit to cover loans and other liabilities, you can do that. You would not be able to get the same value with a permanent life insurance policy.
Frequently asked questions about smoking and life insurance premiums
Q1. Can a life insurance medical exam be avoided if you are a smoker?
Yes, if you are a smoker and want to buy life insurance, there are certain types of policies you can purchase that are typically meant for older people that do not require a medical exam. But such type of life insurance typically has much lower coverage limits, and fewer riders (benefits) than term life insurance policies, and your beneficiaries will receive a smaller payout. If you smoke you can expect premiums to be significantly higher so this option may not be worth it when compared to term life insurance for smokers.
Q2. What if you only smoke socially?
Whether you smoke cigarettes alone or in the company of others has no bearing on how you are classified. Insurance companies will ask if you are a smoker as part of the insurance application. The answer is a simple “yes” or “no.” They do not ask whether you smoke socially or not.
Q3. Can you be denied life insurance if you smoke?
Generally speaking, you will not be denied life insurance because you smoke. You will just have to pay higher premiums. But if smoking caused a health condition such as lung cancer, which causes your death, and your life insurance company finds out you misrepresented yourself as a non-smoker at the time of application, that could be a reason for denial of the death benefit to your beneficiaries.
Q4. How can smokers get lower life insurance rates?
Depending on your insurance company, you may be able to get a lower premium if you can prove you’ve been nicotine-free for a certain period of time. They may require you to take a medical exam. Another way smokers will be able to get the best rates possible is by shopping around. There are life insurance companies that cater to smokers and offer excellent policies. However, smokers will always pay significantly higher premiums for life insurance for the same amount of coverage and type of policy when compared to non-smokers.
Q5. Is vaping considered smoking?
Life insurance companies generally do consider vaping as smoking and base higher premiums on the ‘smoker’ classification.
Your life insurance premiums are based on a number of factors, including your age, health, and lifestyle. If you’re a smoker, you’re considered at higher risk than a non-smoker and, as a result, your premiums will be higher for life insurance. But quitting smoking may have a significant impact on your premiums. And it’s not just your life insurance premiums that will go down when you quit smoking. Quitting smoking has all sorts of health benefits, so you’ll be improving your health and saving money at the same time. Life insurance companies reward healthy applicants with lower premiums.
Smokers are considered high-risk when it comes to life insurance, and thus policies tend to be more expensive. But at the end of the day, it’s worth it to know that you and your family will benefit financially in the event of your death. A life insurance policy gives you the security and peace of mind that money can’t buy.