If you’re annoyed that smokers pay more for life insurance, there’s a simple solution…quit!
Think life insurance for smokers is expensive? Smokers end up paying at least two times more than their healthier, non-smoking counterparts in life insurance policy premiums. Yes, we said at least. There is no leeway when it comes to smoking and the life insurance industry. Why are smokers given such harsh treatment?
The CDC offers plenty of facts about the health risks of smoking and the benefits of quitting smoking. Here are just some facts the CDC provides:
- Smoking harms vital organs and functions in the body
- Smoking is the cause of one in five deaths every year in the United States
- Smoking causes more deaths in the general population than HIV, illegal drug use, alcohol, murders, suicides AND motor vehicle accidents combined!
- Smokers also have increased health risks because of their exposure to lung cancer and other cardiovascular diseases. Actuaries, who calculate life insurance rates for providers, know that betting on the long and healthy life of a smoker is like placing a winning bet on the weakest horse that is bound to buckle under the strain of a couple lengths in the races…it just doesn’t make sense!
The only way to get affordable life insurance as a smoker is to opt for a short term life insurance policy and get on a serious plan to quit smoking. After you quit, you can re-apply and get lower rates. And if you stay off cigarettes for more than a year, you may even be able to qualify for preferred rates, proving of course that you are in otherwise good health and do not have any other debilitating condition.
Having an informed agent is also key, as some life insurance companies make exceptions for smokers, especially those who smoke casually or in social settings. It’s not extremely common, however, so don’t neglect the importance of a carrier’s financial strength (A.M. Best rating) just to get a lower rate. Remember, you can buy short term coverage as a smoker and make a change once you quit.
Now, check out our nifty calculator and learn more about the amount of coverage that’s needed for your life.
Nifty Life Insurance Calculator
Our Life Insurance Calculator can help you get a rough idea of how much coverage you’ll need to make sure your family is okay financially when you die.
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Annual income before tax: $
Annual income is an important factor in determining your needs, but it’s not the only one. When you die, your life insurance is like your final paycheck. -
% of income needed by dependents: %
Because you’ll be gone, presumably they won’t need as much as you’re currently earning. Typically, 80% of your current income is a good place to start. -
Your Age: years
The younger you are, the more years of your income your family stands to lose when you die. -
Number of years benefits are needed:
If you died tomorrow, how many years of income do you want to provide for your family? -
Annual inflation rate (estimate): %
Because of inflation, in order to maintain your family’s current standard of living, you’ll need to plan for increases in their annual income to keep pace. Historically, inflation has averaged between 2% and 4%. -
Annual interest rate (estimate): %
This is an assumption as to how much you believe your spouse will be able to earn on the death benefit proceeds. We have found that most surviving spouses are usually very conservative in how they invest the death benefit. The most common thing we see is that the money gets deposited into a bank account. You know your spouse better than anyone. Pick a number that you feel your spouse will be able to comfortably earn on the proceeds.
So what’s next? Call us at 877-794-9817 and let’s chat about the types of coverage that may make the most sense for you, your health and your lifestyle.
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Resources:
http://www.cdc.gov/tobacco/quit_smoking/how_to_quit/index.htm
