Tobacco consumption could cause irreparable damage to our health, including life-threatening diseases. Underscoring this seriousness, health insurance companies determine whether a potential customer is a smoker or a non-smoker and, if a smoker, how compulsive it is.
Thus, your health insurance premiums may vary depending on your smoking status.
The World Health Organisation data shows that cigarette smoking is the world's most common form of tobacco use. The Global Adult Tobacco Survey reveals that tobacco use in India reduced by 6 per cent in 2016-17 from 2009-10, although there is still a long way to go. Given the significant risks linked with smoking, it is critical to have health insurance coverage.
Can Smokers Get A Health Insurance Policy?
Although there is a belief that health insurance is not available for smokers, it is not true. But they have to pay more money in policy premiums than a non-smoker. Typically, insurance companies consider those who consume cigarettes, cigars, gums, etc., as a smoker.
Says Ankita Konar of Ditto Insurance, the parent of Finshots, a financial newsletter, “Depending on the frequency of smoking, the amount of nicotine content in the urine sample, which gives a measure of how damaged the person's health is or can be in the future, the underwriting team (of the insurance company) takes a call.”
How Does It Affect The Premium?
Health insurance companies ask customers to mention in their application forms if they are a smoker and, if yes, the duration. They may also have to state if they are a compulsive smoker.
The purpose is to know the applicant's health risks. For example, the risks could be high for a chain smoker who consumes 10-12 cigarettes a day. In this case, the insurance companies may ask for medical tests to determine the applicant's insurance premium accordingly.
“In the case of health insurance, your smoking habits won't have a massive impact on your insurance application. You'll likely get your policy for roughly the same price. However, if you are a compulsive smoker, they may increase premiums or reject your application altogether. In which case, you won't have much choice left,” says Konar.
However, she adds, “With term life insurance products, the stakes are higher. Smokers usually have to pay a higher premium. Almost 30-50 per cent higher than regular people. And if you are a compulsive smoker, your application will likely be rejected, just like with health insurance. So there's a lot more riding on your answer.”
Dr Pankaj Shahane, vice president of Health Claims at Digit Insurance, says, “Consuming tobacco-related products is known to cause cancer, lung diseases, chronic bronchitis, and heart-related diseases, among others. If you already have a pre-existing disease (PED) because of smoking-related habits, the insurer might charge a higher premium to issue a health insurance policy. A two to four years waiting period might also be applied for PEDs. This would mean that one would have to complete the requisite PED waiting period before they can avail health insurance benefits for treatments relating to their pre-existing disease.”
Other parameters that could affect the premium amount could be age, location, dependent family members, and the selected health coverage and services.
Why Is Hiding Your Smoking Habit Not Recommended?
It is important to disclose smoking habits even if one is not a regular smoker. Hiding about smoking can create problems while making a claim. The insurance company can reject the claim by giving reasons for non-disclosure.
Says Konar, “Some people want to game the system by lying in their proposal form. They'll tell insurers that they aren't a smoker, even when they do smoke. However, this could have dire consequences. If the insurer later finds out that you lied on your application, it's likely they'll reject your claim.”
“Moreover, companies may even conduct medical tests to check whether you've been smoking in the recent past. And if you have, they'll either reject your application or give you a counter offer. So, it's best to be ethical and truthful and declare everything regarding our health to the best of our knowledge,” she says.
This disclosure is vital not only in health insurance but also in life insurance policies. Insurance companies consider such risks and charge premiums accordingly.
Atri Chakraborty, the chief operating officer of IndiaFirst Life Insurance, says, “Hiding the fact of smoking or any lifestyle habits, which have medically proven track of health risk, may adversely impact the claim settlement stage. During the claim investigation, if the relevant documents of the insured indicate any such habits, the claim may get declined on account of material non-disclosure. Thus, it is highly recommended that all policyholders share all relevant information on the application that helps the insurer to assess the risk accurately.”
Adds Shahane: “It is advisable to disclose all health-related information adequately to the health insurer. Insurers typically ask the policyholder to disclose smoking habits before issuing a health policy. Hiding health ailments is not recommended as it might affect the claim settlement.”
Can An Insurance Company Deny Smokers A Health Policy
Insurers typically do not deny a health insurance policy to smokers or individuals with tobacco-related addiction. However, insurers encourage policyholders to lead a healthy lifestyle and offer wellness benefits. For example, Shahane adds that Digit Insurance offers discounts on health check-ups, gym memberships, diet management, online doctor consultations, chronic care programmes, etc., to all its customers under its wellness programme. Digit Insurance also offers customers discounts on the “Quit Smoking” programme as part of its wellness benefits.
What Should Smokers Do?
Before taking health insurance, you must check the premiums and policy features from different companies for the best deal. However, some companies do not charge extra premiums from smokers, whether occasional or chronic smokers.
Alok Agarwal, the executive director of ICICI Lombard, says, “Our aim is to help customers develop healthy habits and lifestyles to reduce the associated health risks. Therefore, we do not load premiums for smoking.”
But even if the premium is higher, getting health insurance for medical emergencies is essential.