Back in the day there was a company that underwrote life insurance for “social smokers”, which by their definition was anyone who smoked maybe two or three cigarettes a day. That was US Financial, the author and creator of the clinical underwriting idea. While other companies made no distinction between someone who smoked two or forty a day, they understood that from a medical science standpoint there was absolutely a difference so they gave non smoking rates to “social smokers”. That gave them rates that were roughly half as high as most preferred smoker rates out there.
US Financial was unfortunately gobbled up and thrown away and clinical underwriting took a several year hit before other companies caught on and started filling the void in impaired risk life insurance such as diabetes, cancer and cardiac issues. But no one had reopened the Pandora’s box with cigarettes…..until today. One of our major carriers has announced that they will allow 1-2 cigarettes a month at non smoking rates. This is essentially the same route taken by many leading companies for other types of nicotine use such as cigars. As long as it truly is an occasional thing, and know up front that they will check your social history in your medical records, you are now able to buy life insurance for about 1/3 the cost of what someone who smokes even a small amount, but on a regular basis.
This isn’t just one of those little ripples on the life insurance underwriting pond. While most people who smoke won’t qualify for this break because the amount is a knock out qualification, those that really just have a cigarette after golf at the bar, or at a few summer BBQ’s are going to see serious savings. A male that is 50 and in good health, but smokes, would pay about $1800 annually for $250,000 of 20 year term. If that same person truly met the criteria for this social or occasional smoker category they would pay just over $600 a year, a savings of $24,000 over the life of the policy.
Bottom line. I’ll have more on this in the days to come but suffice it to say, some cigarette smokers just got an early Christmas life insurance gift. If you have questions or think you qualify but want to know for sure, call or email me directly. My name is Ed Hinerman. Let’s talk.
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