Life Insurance and Smoking

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I have a prospect who used to be a smoker but quit smoking. Last year they bought a life insurance policy it was a term life policy and it was issued at a non-smokers rate because they quit smoking three years earlier. The customer called me this week and told me that they had started smoking again and they wanted to make sure that if something happened they would still get the life insurance policy to pay out upon death.

Since the policy was issued at a non-smokers rate because they had quit smoking and they let the insurance company know on the application that they used to smoke I'm curious if this will have an effect on the current policy since they have resumed smoking.

So basically a former smoker purchase a life insurance policy at a non-smokers rate. They have started smoking again and want to know if they die of lung cancer or any other smoking-related illness that the policy will still pay out. Can anyone provide any insight to situation like this?
 
Re: Life Insurane and Smoking.

I have a prospect who used to be a smoker but quit smoking. Last year they bought a life insurance policy it was a term life policy and it was issued at a non-smokers rate because they quit smoking three years earlier. The customer called me this week and told me that they had started smoking again and they wanted to make sure that if something happened they would still get the life insurance policy to pay out upon death.

Since the policy was issued at a non-smokers rate because they had quit smoking and they let the insurance company know on the application that they used to smoke I'm curious if this will have an effect on the current policy since they have resumed smoking.

So basically a former smoker purchase a life insurance policy at a non-smokers rate. They have started smoking again and want to know if they die of lung cancer or any other smoking-related illness that the policy will still pay out. Can anyone provide any insight to situation like this?

First) he answered truthfully at time of applications. So all good. Second) if Labs done even better. Third) at two years it does not matter as it will be non contestible.

Lee
 
I have a prospect who used to be a smoker but quit smoking. Last year they bought a life insurance policy it was a term life policy and it was issued at a non-smokers rate because they quit smoking three years earlier. The customer called me this week and told me that they had started smoking again and they wanted to make sure that if something happened they would still get the life insurance policy to pay out upon death.

Since the policy was issued at a non-smokers rate because they had quit smoking and they let the insurance company know on the application that they used to smoke I'm curious if this will have an effect on the current policy since they have resumed smoking.

So basically a former smoker purchase a life insurance policy at a non-smokers rate. They have started smoking again and want to know if they die of lung cancer or any other smoking-related illness that the policy will still pay out. Can anyone provide any insight to situation like this?

Had the exact same thing happen to me last year. As long as he was a non smoker for the time period on the application it does not matter if he starts smoking again.

I hate it when I run into a policy I am trying to replace and think I can lower their premium, then find out the writing agent wrote them NT even though they
admitted using tobacco. Sure can't lower their premium with new tobacco rates.:no:
 
Had the exact same thing happen to me last year. As long as he was a non smoker for the time period on the application it does not matter if he starts smoking again.

I hate it when I run into a policy I am trying to replace and think I can lower their premium, then find out the writing agent wrote them NT even though they
admitted using tobacco. Sure can't lower their premium with new tobacco rates.:no:

If it is inside two years AND they were a smoker AND they want a claim to be paid if something happens, then really it is easy. Yes, they are going to pay more, but now the policy is worth something.
 
If it is inside two years AND they were a smoker AND they want a claim to be paid if something happens, then really it is easy. Yes, they are going to pay more, but now the policy is worth something.

That is very true and I have done that within the two year period. A few weeks ago I was asking a lady about her health while she was smoking a cigarette.
I was reviewing her policy which was 3 years old. Saw tobacco question checked "NO"


Conversation:

Me....do you have any health issues?
Her. Well...copd( as i am watching the smoke from her cigarette cloud the room.
Me...How long have you had COPD?
Her.....about 5 or 6 years.
Me.....thinking awww hell!:laugh:

I did explain what had happened to her but advised her to not let that policy lapse.
 
The two year exclusion does not always apply. In my state how they answer the smoking questions does matter even after two years. My state has made an exception for that particular question. The state says if they lie on the app about smoking, a contract was never formed. NO payment refund of premiums. This has been that way for about 15-20 years. We used to pay out a death benefit equal to what the premium would buy for a smoker. The state said NO.

If you quit and start again, usually you'll be just fine provided you fit within the parameters established by the insurance carrier for classification.
 
Most application ask the Non-Smoker & Smoker/Non-tobacco as the previous 12 or 24 months.

So if they quit 3 years before the application I will find it hard to believe that a claim would be contested.... especially if labs were done.
 
The two year exclusion does not always apply. In my state how they answer the smoking questions does matter even after two years. My state has made an exception for that particular question. The state says if they lie on the app about smoking, a contract was never formed. NO payment refund of premiums. This has been that way for about 15-20 years. We used to pay out a death benefit equal to what the premium would buy for a smoker. The state said NO.

If you quit and start again, usually you'll be just fine provided you fit within the parameters established by the insurance carrier for classification.

It is not that way in NC unless something has changed recently. Have you ever heard of a death claim in your state being denied that was beyond the 2 year contestable period for any reason?
 
"It is not that way in NC unless something has changed recently. Have you ever heard of a death claim in your state being denied that was beyond the 2 year contestable period for any reason"

Yes, a while ago. When I was with NYL, we paid death claims at smokers rates all the time. The OIC stepped in and gave us a cease and desist for this practice as the OIC considered by lying on the app about smoking that no contract was formed.

From a genworth application

MAINE, TENNESSEE, VIRGINIA and WASHINGTON
It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties
may include imprisonment, fines or a denial of insurance benefits.
 
"It is not that way in NC unless something has changed recently. Have you ever heard of a death claim in your state being denied that was beyond the 2 year contestable period for any reason"

Yes, a while ago. When I was with NYL, we paid death claims at smokers rates all the time. The OIC stepped in and gave us a cease and desist for this practice as the OIC considered by lying on the app about smoking that no contract was formed.

From a genworth application

MAINE, TENNESSEE, VIRGINIA and WASHINGTON
It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties
may include imprisonment, fines or a denial of insurance benefits.

Crap, so I shouldn't have told them I sold insurance on my application? :swoon:
 
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