E-Cigarette - Increase Premium

While the long-term effects of vaping are still unknown, there’s little doubt that vaping won’t go in your favor when it comes to life insurance. The vaping-related illness outbreak reached more 1.888 probable cases with 37 fatalities as of Oct. 29, according to the Centre for Disease Control and Prevention. 

It’s still unclear what is making people sick. Nearly 9 of 10 patients with lung problems said they vaped products containing THC, the active ingredient in marijuana, according to the CDC’s analysis of 867 people with lung problems associated with e-cigarette use.

Life insurance companies have long used smoking as a factor to determine coverage. It is not surprising that the use of any product with nicotine would raise a red flag for a life insurance company. But exactly how an individual company will treat an application for a person who uses e-cigarettes can vary from company to company.”

Companies typically put customers in various classes when determining premiums, each of which have different rates: preferred plus, preferred standard, plus standard, and substandard. These are ranked from most to least healthy.

Although terms may vary slightly, the average monthly premium for a 35-year-old male classified as “preferred tobacco” — healthy, but a smoker— with a $500,000, 20-year term life insurance policy is $108.72. If that applicant had a preferred non-tobacco classification — a healthy nonsmoker, that is — he would pay just $31.72 per month.

In October,nPrudential Financial increased its life insurance rate for e-cigarette users to match those of smokers. People who vape will be classified as smokers, who are usually charged higher rates than nonsmokers, the company said.

“Increased attention on vaping over the past few months and linkages to a few deaths and multiple illnesses, have resulted in warnings from the FDA, federal government and some states banning the use of flavored e-cigarettes,” the Prudential statement said. 

Nearly every major life insurance company classifies vapers as smokers when determining rates because its long-term effects are still undetermined.That’s not likely to change anytime soon. Companies started to distinguish between smokers and nonsmokers when they had hard data on how much mortality there is for smokers versus nonsmokers.

Disclosing nicotine use - If you smoke or vape, it’s important to disclose this to your insurance broker. Some carriers are more favorable than others to smokers, and a broker can steer you in the right direction.

It’s important to get the right amount of coverage to protect yourself and your family. During the one to two years after your policy goes into effect, there is a so-called contestability period during which the company can review your application to make sure there are no misrepresentations. 

Being honest when you apply will help ensure you get the coverage you need. Premiums could go up and could be price prohibitive — it doesn’t lessen the need for the amount of insurance you have to get.