Difference between Life Insurance and Life Assurance

Biphoo

5 Oct 2017

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What is Variable Universal Life Insurance

MoreCan You Hide Smoking From Life Insurance Companies? What if you lied about your smoking habit on your life insurance application? And what happens if the insurance company finds out? How much do you have to smoke to even be considered a smoker? The answers might surprise you. Life insurance companies like their policyholders to be in good health. So much so that some companies have three different premium classifications: standard, preferred or preferred plus. You’re rewarded with lower premiums if you’re super-healthy and haven’t smoked in five years because that reduces your chances of dying soon. Being just “normally healthy” requires that you haven’t used nicotine in the past three years and still gets you lower premiums. A standard rate requires that you have not used nicotine within the past year.

Life Insurance for Smokers

In the Best Life Insurance Plan Online, you’re considered a smoker if you answer “yes” to the smoking question on your insurance application. If you’re asked if you’ve used tobacco products, including cigarettes, cigars, and chewing tobacco, within the past three years — and you have — your answer should be yes (likewise for questions going back two years and one year). If you enjoy a good cigar from time to time or smoke just two cigarettes year, you are a smoker by insurance standards, even though the nicotine traces won’t show up in your required urine test. How should the occasional smoker answer that question? You should probably let your conscience be your guide.

With rates as competitive as they are, life insurance companies try to find out as much as possible about your health. Understandably, a nonsmoker’s application is likely to be examined a bit closer than a smoker’s, especially the results of the urine sample. However, it is possible for the nicotine level in a smoker’s urine to be low enough to escape detection. In fact, according to a 1988 surgeon general’s report, your body metabolizes or breaks down, nicotine within 72 hours. The Centers for Disease Control and Prevention’s Office on Smoking says that there’s such a small amount of cotinine present in your body after three days that it’s either not detectable or attributed to second-hand smoke. Cotinine is a primary metabolite of nicotine and is the most common identifier for nicotine levels in the urine. Therefore, even heavy smokers who can abstain for three days could theoretically lie about their smoking and go undetected.Is It Worth It?

A Guide to Life Assurance

Some insurance companies we spoke to say they have caught smokers who claimed to be nonsmokers during the underwriting process. When this happens, the “proposed insured,” as you are known, is simply given the smoker rate when the policy is approved. None of the insurance companies admitted they would automatically reject you if they caught you lying. As an extra precaution, The Horace Mann Cos. of Illinois performs random phone calls in which applicants are again asked, among other things, about smoking. They hope to weed out liars through the one-on-one conversation or by spotting inconsistencies on the policy application. On the other hand, Hartford Life and Compare Life Insurance Connecticut are confident it could finger a deceptive smoker during underwriting, pointing out that urine testing is required of applicants over the age of 16.

Let’s continue the scenario: Your urine sample doesn’t show enough nicotine to prove you’re a smoker, so your life insurance policy is issued at a preferred and/or nonsmoker rate. Then, the unthinkable happens: You die. Most life insurance policies carry a two-year “incontestable clause” that allows the insurance company to challenge a death claim. If you die within the first two years as a result of, say, a car accident, and it comes out that you were, in fact, a smoker, your insurer would have the right to “rescind” the policy or simply deny the claim. If you lied about smoking to Hartford Life and you died after two years, the company would pay the claim. However, a spokesperson emphasizes that the insurer’s underwriting is so stringent that it doesn’t expect to have a problem with dishonest smokers.

If you die three years after your policy is issued, underwriters would take a closer look to see if anything on your application and medical exam could be linked to smoking. A smoking-related illness, such as lung cancer or heart disease, would send up red flags, but a fatal car accident clearly would not. Underwriters we spoke to agree that there must be very solid reasons for denying a death claim. Another option for the Cheap Life Insurance is to pay a death claim equal to the amount of life insurance you would have purchased with your money at a smoker’s rate. All the companies we contacted stated flatly that after a long period of time, such as 10 years, they would pay the claim. Once your policy is this far past the two-year contestability period, linking your death to smoking is less important to them than not reneging on a death claim. It’s statistically unlikely but not out of the question that an adult will take up smoking (most smokers start as teenagers). That said, insurers generally don’t care if you begin smoking after the policy is issued and, in the event of your death, would simply pay the claim.

Biphoo

5 Oct 2017

143 Views