Cost & Coverage
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E-cig users may be required to pay the same rates as smokers when purchasing life insurance.
Many smokers switch to e-cigarettes because they believe it’s healthier to vape than to inhale tobacco smoke. Certainly, e-cig users who previously smoked cigarettes usually feel healthier, reporting that they have a greater lung capacity and less irritated sinuses. However, the recent research on vaping is limited and the jury is still out on its health effects.
Every vape device contains some variation of the build: a coil, a battery, a tank, and the juice in the tank. Some vapes can also be enhanced by a virtually limitless array of mods and upgrades, which can increase battery power, tank capacity, and vapor quality.
Compared to cigarettes, vaping is still pretty new, and it’s mostly unregulated. That means there is relative difficulty in tracing the materials in the device – the metal used in the coil or the chemicals in the juice, for example. If your vape device or mods were made in a place with less quality control, you may be inhaling harmful substances. (When you inhale from a vape, the battery heats the coil which atomizes the e-juice, and this can create undesirable byproducts.) Health effects aside, that’s big reason why every major life insurance company classifies e-cig users as smokers for the purpose of determining their rates.
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When you apply for life insurance, you go through a process called underwriting during which you’ll be assigned an insurance classification. Life insurance classifications are how life insurance companies determine your premium rates. The healthier you are, and the less complicated your family medical history, the better your classification, and the lower your premium rates will be.
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In order from best, or most healthy, to worst, or least healthy, the classifications are:
Every insurance company (or their underwriters) uses a similar classification system, although they may call them different things and have various subcategories within each one.
It’s possible to be a very healthy person, but still receive a less favorable classification because you use tobacco products. That’s because you’ll get a version of one of the base classifications above but with the caveat that you’re a smoker. During underwriting, you’ll be asked to take a paramedical exam, for which you may have to give a urine sample that would reveal the presence of any nicotine in your body.
The classification will be called something like “Preferred Smoker” or “Preferred Tobacco” as opposed to the “Preferred Nonsmoker” classification you’d get otherwise. Some classifications are off-limits to nicotine users altogether: There’s no such thing as “Preferred Plus Tobacco.”
Depending on your age, getting a smoker or tobacco classification can increase your rates by over $100 per month. The average premium for a 35-year-old male classified as Preferred Tobacco with a $500,000, 20-year term life insurance policy is $108.72. That same applicant with a Preferred Non-Tobacco classification would pay just $31.72 per month.
|Rating||Monthly Premium||Annual Premium|
|Preferred Plus Non-Tobacco||$23.41||$267.50|
|Standard Plus Non-Tobacco||$40.47||$462.50|
|Standard Non-Tobacco, Table 2||$71.10||$812.50|
|Standard Non-Tobacco, Table 3||$82.03||$937.50|
|Standard Non-Tobacco, Table 4||$92.97||$1,062.50|
|Rating||Monthly Premium||Annual Premium|
|Standard Tobacco, Table 2||$206.94||$2,365.00|
|Standard Tobacco, Table 3||$240.51||$2,748.75|
|Standard Tobacco, Table 4||$274.09||$3,132.50|
If you’re concerned that your health or tobacco-usage habits are making your life insurance premiums too expensive, Policygenius can help you find a carrier that works with your coverage needs.
If you vape, almost every insurance company will charge you a higher rate to get life insurance. That’s partially due to the unfamiliarity life insurance companies have with vaping; they classify e-cigs as a tobacco device, even though e-juice doesn’t contain any tobacco. (Juice does contain nicotine, the active chemical in tobacco, but no plant matter is burned when you vape.)
The other reason is that the health effects of vaping are still undetermined. While e-cigarettes are probably healthier than traditional cigarettes, they simply have not been subjected to the same rigorous scientific investigation.
Because of this, you’ll likely be assessed with a smoker classification, which means higher life insurance rates. In order to avoid this classification and keep your rates low, you should quit vaping long before you apply for life insurance. Most insurers want to see that you’re nicotine-free for a specific span of time, which is usually at least 12 months but could be as long as five years, before they’ll offer you a more favorable classification.
As of September 2019, the Food and Drug Administration (FDA) is ramping up plans to ban all flavored e-cigs. With the current scrutiny of e-cigarettes and vaping, insurance companies have taken a closer look at how they classify vapers and what that means for their rates.
As a result, there will no longer be any carriers offering nonsmoker rates moving forward. Patrick Hanzel, Policygenius’ Advanced Planning Specialist and Certified Financial Planner explains, "Life insurance companies are very risk averse. If there is a particular area in the medical field with a lot of uncertainty, most will err on the side of caution. On top of that, they also want to make sure they protect their current policy holders."
You should tell the whole truth about your nicotine usage, even if lying could result in a better rate. That’s because every life insurance company enforces what’s called a contestability period for the first two years after purchasing a policy. If you misrepresent your nicotine usage, and you die during the contestability period, the life insurance company may refuse to pay the death benefit owed to your beneficiaries.
Even if the carrier does choose to pay out, it may reduce the amount of the death benefit by the amount you would’ve been paying in premiums had you accurately described your vaping habits. The contestability clause applies even if tobacco or nicotine isn’t what killed you.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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