Smoker’s life insurance – Smoking can kill your wallet
Smoking can kill your wallet
It is common knowledge that smoking can cause many health problems, and the detrimental effects are often seen in a smoker's overall physical health. What people may not realize is how smoking can directly affect their financial well-being. A smoker that would like to purchase insurance will have to pay higher premiums than those who do not smoke. Additionally, smokers are more likely to have worse health conditions and diseases which could result in higher healthcare costs for them.
This blog post will walk you through the different types of smoker's life insurance along with the associated rates worldwide and provide examples of what coverages they include
and what it would cost if a smoker were to purchase them at today’s rates.
There are two main types of smoker's policies: those that are indemnity and those that are term. Each has its own benefits and drawbacks that we will discuss later. The first thing to note, regardless if you get an indemnity or term policy, is they treat smokers differently than nonsmokers. The next thing to understand is the significance of the word "policy" in life insurance and just how it affects how you will be treated as a client when purchasing life insurance (see below). The third thing to know is smoker's policies have their own rule sets which we will discuss shortly.
This blog post will cover the following:
What are smoker's life insurance policies?
What 'life' does it cover?
Who pays for it?
How much do they cost? and...
How to lower your costs.
You may be asking yourself: What is life insurance? Life insurance is a form of insurance which covers you or your family if you die. Basically, it is designed to protect those who rely on you financially (usually family members) from the financial hardship that may come with losing a primary income due to a death. There are different types of life insurance based on their duration/term and whether they are indemnity or term policies. This blog post will assume that we are talking about term policies as indemnity is not what we want.
The length of a term policy can vary; one year, 5 years, 10 years, etc... These policies do not have “renewability” and once they expire, you cannot renew them (unless you are under a guaranteed plan). Each term policy is an annual renewable contract that allows you to purchase the same amount of coverage for each year within the contract without taking a medical exam. It is important to note that various companies require different waiting periods before you can get term life insurance. Most require at least two years while others may require as little as one year. The only real difference between indemnity and term life insurance is that with indemnity, only the face value changes (due to premium payment changes). With a term policy, it's the face value and premium payment amount that change during each year of your contract.
The following image shows the difference between indemnity and term life insurance and how it affects your premiums. It also illustrates the difference between each type of insurance based on length of coverage. If you're taking out a 10-year term policy, you pay higher rates compared to something that's only 3 years in length.
The rates and coverages within a policy can vary depending on what the policy covers and what your health is like at the time when you purchase it. Rates are actually determined by a mathematical formula which takes into account such factors as age, gender, occupation, medical history (and any pre-existing conditions), current health status, etc... These factors affect premiums for both indemnity and term policies.
The following image illustrates what factors can affect your premium for a smoker’s life insurance policy:
There are two types of smoker's life insurance: an indemnity policy and a term policy. Without getting too technical, the difference between the two is that with an indemnity policy, the face value of the policies changes as you continue to pay premiums which can be beneficial if you have a family member who may need immediate financial assistance in the case of your death. With a term policy, the face value value and premium will remain constant over time. Let's go over each type by talking about what they cover and how it affects costs:
Term Policies often come with higher rates than indemnity policies. However, a term policy will remain the same and subsequent premiums will remain the same throughout the entire term. This means you're locked into that premium cost (no matter how your health changes). In contrast to a term policy, an indemnity policy's premium can change if you become ill or injured. The following image illustrates how an indemnity policy increases in cost as you progress through life:
In most cases, both types of policies have similar coverage for things like accidental death and dismemberment (AD&D). All policies have similar coverages to ensure that people do not make themselves susceptible to paying out more money than they should due to insurance fraud or other factors.
In today's world, life insurance is more expensive than ever. Why? There are many reasons but the main one is that the number of aware policies has increased. In a recent article by the Wall Street Journal, it was mentioned that over 40% of people who took out life insurance in 1999 did not renew it after 10 years. The article also stated that insurers are now less inclined to sell group life and unit-linked policies as they can more effectively target single-product advertisements towards specific groups like baby boomers or seniors. Many companies have also incorporated new and changing policies as well as cut back on coverage amounts in the hopes of improving their chances at selling the most policies to new clients.
In addition to that, one of the main reasons life insurance is so costly is because companies start charging you right away. This means that if you are under a smoker's policy, your company may start charging you for a new policy within 30 days of starting your term. The next thing to understand is that while an indemnity policy will be more costly in premiums due to the fact that your face value can rise as your health declines (this means they get paid more based on increasing health costs), most people cannot afford life insurance at all. Why? Most people do not maintain good insurance or adequate coverage amounts. This leads us to the next thing we should know.
The majority of people do not have enough life insurance. A recent article by the New York Times stated that the average life insurance coverage for an individual is only $150,000. The majority of people would be better off purchasing a policy worth at least $500,000 while couples with children will want to go with at least a million dollars. This is also important when you're talking about needs-based policies and how you can get some financial relief if your spouse dies or even if you have dependents.
Another way to protect yourself from losing money due to a death is by getting disability insurance.
Conclusion
Although it may seem like there is no real way to save money on life (or accident) insurance, the reality is that you can. By understanding what's going on with the insurance companies and what factors affect rates, you'll be able to get the best deals and prices for your savings. If you need help or are looking for a company to write you a policy, please visit our Life Insurance Quotes section today!
If I have been injured in an auto accident can I file a workers' comp claim? Workers' Comp quotes for your car accident injuries vary greatly from state to state on both sides of the equation.