When is Your Client Really a Non-Smoker?

“I quit smoking” your client exclaims to you. “Why would I be charged smoker rates?” or “Why can’t I get preferred, I am not on any medications?”  What your client may have failed to tell you, or you may have failed to ask the question properly, is that he or she may have quit only a month ago.  Well…that is not long enough to be a non-smoker!

Life insurance carriers each have specific timeframe guidelines on how long your client must go without using tobacco or nicotine-based products to receive a non-nicotine classification. Here is an example of a leading term carrier:

• Standard Nonsmoker: No use of tobacco or nicotine-based products in last 12 months
• Standard Plus: No use of tobacco or nicotine-based products in last 12 months
• Preferred Nonsmoker: No use of tobacco or nicotine-based products in last 24 months
• Preferred Plus: No use of tobacco or nicotine-based products in last 36 months

So, what, besides cigarettes, are tobacco or nicotine-based products?

• Cigars
• Pipes
• Chewing tobacco
• Hookahs
• Electronic cigarettes
• Snuff
• Dissolvable nicotine products
• Marijuana
• Nicotine patches and gum

Each of these products have health risks and in the life insurance business, that means your clients can expect the carrier to charge them more. That being said, each carrier may underwrite for different rates for different forms of tobacco.  For instance, a “celebratory cigar” may be ok with some carriers, while not with others.  Dippers and chewers may also be able to get non-tobacco rates with some carriers.  One of the keys here is to ask the right questions.  Not “Do you smoke cigarettes?” but “Do you use any form of tobacco or nicotine?” the latter encompassing all the products available that can affect your client’s life insurance rates.

Reconsideration

If your client has quit tobacco use after accepting a life insurance policy with a tobacco rate classification, they can request a reconsideration of the rate after a given timeframe provided they have not used nicotine products for a certain period of time while being covered by the policy. This also varies from carrier to carrier.  With some it is 12 months, with others 24 months.  If this is something you are discussing with your client prior to the sale, considering the carriers’ rules will be important.  Lab work will need to be supplied to the carrier along with a request for reconsideration.  The carrier may or may not pay for the labs.

I do want to point out that if your client requests a reconsideration it could be denied based on their health history as well. If they would not be considered preferred with a new application, they will not get preferred with the reconsideration.  Also, as an assurance, the carrier cannot put the client to a lower classification than how their policy was approved; they may just deny the request for reconsideration.

Now if your client boasts about quitting smoking (a good thing, by the way) make sure you also ask them how long ago and take that into consideration when looking at life insurance premiums. Here is a handy chart for you to review with your newly non-tobacco clients or give us a call to discuss the best option for your client.