Life Insurance and Cigars

[JamesHart]

Hey everyone,

I bought a $1 million 20 year term policy 3 years ago and at that time, I didn't use tobacco of any kind. Over the last 6 months, I have started smoking maybe 1 cigar every 2 weeks. Just something I do when the weather is nice outside.

Should I have my policy redone? I didn't lie on my original app, but I'm worried that if I were to die, the insurance company may not pay out. Stuff like this must happen to a certain percentage of people, right?

What do you guys think?

 

[TampaHound]

Well I do appreciate your honesty, and it may be an unpopular answer but no. The reason is because you have had your policy for 3 years and are out of the contestability period.

Going to edit this a little. If you were to report the smoking now, depending on the company, they may charge you the smoker rate going forward; and ask for the difference over those previous three years of premiums to be paid. OR they may want to rewrite the policy with the higher smoker rate AND have a new contestability period.

That being said. Give up the habit overall, your lungs will thank you for it.

 

[Cornelius]

Companies can go back and charge smoker rates or rescind the policy after the contestability period if a person starts smoking after 2 years?

 

[goillini52]

Companies can go back and charge smoker rates or rescind the policy after the contestability period if a person starts smoking after 2 years?

No.

 

[Cornelius]

No was my thinking also.

 

[billyb]

What happens after the policy is approved and placed does not have to be reported to the company. Since your policy is over 3 years old I wouldn't worry about it. The company will pay with a death certificate and claimant's statement. No need to request any additional info.

 

[InsuranceIsLife]

I wouldn't worry about it one bit. (1) You didn't lie on the application (2) You're past the contestability period (3) Many carriers don't even classify cigar use as a true "Tobacco/Smoker rate"

Just my 2 cents.

 

[Cornelius]

This can lead to a good discussion. I once heard or read that during the contestability period a carrier can look at debit card purchases and if there is a trend of cigarette purchases on a debit card that may show the dead person may have been a smoker.

Now remember I said I'm not sure of the source. If anyone has any weird contestability stories feel free to share.

 

[InsuranceIsLife]

This can lead to a good discussion. I once heard or read that during the contestability period a carrier can look at debit card purchases and if there is a trend of cigarette purchases on a debit card that may show the dead person may have been a smoker.

Now remember I said I'm not sure of the source. If anyone has any weird contestability stories feel free to share.

I've heard something similar as well. However, my understanding is something that could possibly be used for quirky situations in underwriting where they can check to see purchase trends on alcohol, tobacco, etc.. believe it's called "credit based mortality." I'm not educated enough on it to say if it's used on death claims, but if no history of purchased tobacco products before the contestibililty period I wouldn't think there's any way a claim could be denied

 

[pfg1]

Many companies give a non tobacco rating for someone smoking a couple cigars a month anyhow.