A life insurance company uses various factors to determine the cost of the insured’s policy. Once of those factors includes the insured’s smoking status. The smoking status typically consists of “standard non-smoker,” “premium non-smoker” and “non-tobacco user.” The premium for a smoker is always going to be higher than that someone who does not smoke.
When an insurer calculates the premium for a life insurance policy they will apply standard non-smoker rates on a policy if an insured has not smoked cigarettes during a specific time period, such as 12 months. “Standard non-smoker” is the lowest type of non-smoker status and will affect less than regular smoker rates but more than other non-smoker rates. This is because an insurer is looking at the amount of time a person has abstained from smoking cigarettes. Those that have not smoked for whatever period is specified are seen as a better risk than people who continue to smoke. A “standard non-smoker” is what is usually used when other non-smoker rates are not available.
The next type of smoker status is what is referred to as “premium non-smoker.” This type of smoker status applies when an individual has abstained from smoking cigarettes for at least 24 months. The rates for a premium non-smoker are going to be much better than those of a standard non-smoker and generally indicate that a person is a much better risk and can receive better rates on their life insurance policy. Generally, a premium non-smoker is the most common type of status that is applied to a life insurance policy. Although, still very good this status still does not provide the best rates for a life insurance policy.
The best type of smoker status that is available is known by some insurance companies as “non-tobacco user.” A non-tobacco user status indicates that an individual has abstained from using tobacco products the past 12 – 24 months. Notice that an insured who has used tobacco is not eligible for the premier rates but is still eligible for premium non-smoker. Sometimes insurance companies have little quirks in their determinations that can be beneficial to an insured. They can also be there to use as a marketing tool to promote an insurer’s products as well. In any case, the non-tobacco user rates are the best type status to have when applying for life insurance.
Someone who smokes tobacco is always going to pay more for life insurance than someone who does not, yet another incentive for people to stop smoking.