Term Life Insurance Articles
How Smoking Can Limit Certain Life Insurance Plan Benefits
2011-01-02
There are many factors that go into calculating the cost of a life insurance plan. Age, medical history and lifestyle are just a few of the questions an agent will ask while determining the best plan to fit an individual. Smoking can be one factor that significantly increases the premium associated with a life insurance plan and can also limit the benefits it provides. It is important to understand the detrimental affects smoking has on life insurance.
For insurance companies, the basic premise of a policy is to provide some monetary benefit upon death. While there are many different types of policies such as term, whole, permanent and renewable; each one considers age and smoking as two of the top factors associated with both their cost and the benefits provided. Insurance providers first raise premiums on smokers. This is due to the simple fact that smoking leads to a wide range of health issues, both for the individual and their family. Depending on the age of the individual when the policy is established, smoking can increase rates as much as four fold. Agents will ask a battery of questions regarding a smoker's lifestyle. How many packs per day? How long have they been smoking? How much exercise do they get? All of these questions help establish the risk an insurance vendor will be taking. Based on this risk, a provider could turn someone down, assuming the risk is too great. In this case, benefits are not just limited, they are denied.
In most cases, a life insurance plan will provide a benefit not only in death but also if someone becomes permanently disabled. Smoking obviously increases the risk of heart disease and stroke. In many instances people are left with debilitating permanent injuries that leave them with no way of securing income. Often, insurance companies decrease the limits available to a smoker because of their elevated risk and likelihood that something such as this could occur.
If a smoker purchases a term life insurance plan, insurance companies could limit the length of that term, based on a smoker's current age. Buying a policy at a young age, a smoker may be able to limit the affects it might have on the policy's term and premium. However, trying to purchase a term plan after years of smoking could risk only being offered a plan that lasts for a few years. It again goes back to the risk involved with insuring smokers.
Understanding the affects smoking has on life insurance is important not only to the individual but to their family as well. Rising costs and limited benefits could be the end result of extended smoking.
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There are many factors that go into calculating the cost of a life insurance plan. Age, medical history and lifestyle are just a few of the questions an agent will ask while determining the best plan to fit an individual. Smoking can be one factor that significantly increases the premium associated with a life insurance plan and can also limit the benefits it provides. It is important to understand the detrimental affects smoking has on life insurance.
For insurance companies, the basic premise of a policy is to provide some monetary benefit upon death. While there are many different types of policies such as term, whole, permanent and renewable; each one considers age and smoking as two of the top factors associated with both their cost and the benefits provided. Insurance providers first raise premiums on smokers. This is due to the simple fact that smoking leads to a wide range of health issues, both for the individual and their family. Depending on the age of the individual when the policy is established, smoking can increase rates as much as four fold. Agents will ask a battery of questions regarding a smoker's lifestyle. How many packs per day? How long have they been smoking? How much exercise do they get? All of these questions help establish the risk an insurance vendor will be taking. Based on this risk, a provider could turn someone down, assuming the risk is too great. In this case, benefits are not just limited, they are denied.
In most cases, a life insurance plan will provide a benefit not only in death but also if someone becomes permanently disabled. Smoking obviously increases the risk of heart disease and stroke. In many instances people are left with debilitating permanent injuries that leave them with no way of securing income. Often, insurance companies decrease the limits available to a smoker because of their elevated risk and likelihood that something such as this could occur.
If a smoker purchases a term life insurance plan, insurance companies could limit the length of that term, based on a smoker's current age. Buying a policy at a young age, a smoker may be able to limit the affects it might have on the policy's term and premium. However, trying to purchase a term plan after years of smoking could risk only being offered a plan that lasts for a few years. It again goes back to the risk involved with insuring smokers.
Understanding the affects smoking has on life insurance is important not only to the individual but to their family as well. Rising costs and limited benefits could be the end result of extended smoking.
