Smokers worried about paying expensive life insurance premiums often ask about no-exam coverage.
After all, they say, if I’m going to pay super high tobacco premiums anyway, I may as well skip the medical exam.
That’s a logical assumption, but it’s not always correct: Many smokers can still get affordable life insurance rates even with a traditional, medically underwritten policy.
No Exam Life Insurance for Smokers
We call no-exam coverage “last-resort” life insurance for a reason. It’s typically not your best option unless it’s your only option, even if you smoke.
Here’s why:
- Higher Premiums: Premiums for no-exam insurance soar above traditional life insurance premiums because underwriters have much less health data to work with. Less data leads to more assumptions, and you can bet underwriters won’t assume the best about your health.
- Lower Coverage Caps: You may be able to find $250,000 to $350,000 in simplified issue no-exam coverage, but the death benefit won’t come close to the $1 million to $2 million a traditional policy could offer. (Guaranteed issue policies usually offer up to only $25,000 in coverage.)
- Waiting Periods: Many guaranteed issue policies usually make policyholders wait one to two years before the coverage becomes fully available. If you died within the first year of coverage, your survivors could claim only a refund of your premiums.
Yes, smoking drives up life insurance premiums, but your tobacco status is still just one among many factors underwriters consider when you apply for coverage.
If smoking is your only high-risk health and lifestyle issue, you shouldn’t need a no-exam policy to get covered.
How to Get the Best Life Insurance Rates If You Smoke
To find the best rates on coverage for smokers, you’ll need to work with an independent life insurance agency like ours or with an independent agent in your area.
Independent agents have policies from dozens of insurers which means we can help match your specific needs with a company best suited for you.
Agents who work for a specific insurance company will not usually tell you about options from other, competing insurers, even if they’re significantly better for you.
Best No-Exam Insurance Options for Smokers
If you have determined no-exam coverage to be your best option, you’re in luck. No-exam coverage should be quick and easy to get because it’s so simple.
In fact, you could have your coverage in place within 48 hours if all goes as planned. To help your process go as planned be sure you’re working with an independent agent who can give you access to insurance customized for your life.
No-exam coverage comes in one of two types of life insurance options:
Simplified Issue Life Insurance
Simplified issue insurance does not require a medical exam, but underwriters will still find out a lot about your health through a detailed questionnaire and routine database checks.
After you apply for simplified issue coverage — typically through an online application — you’ll complete the questionnaire either online, over the phone, or on paper.
This more thorough process allows simplified issue policies to reach up to $350,000 in coverage.
The Questionnaire
During your questionnaire, you’ll be asked about your:
- Basic Vitals: Your age, weight, and height can impact your premiums so the insurance company will want to know these basics.
- Tobacco Use: What kind of tobacco product, how often you use it, how long you have used it can impact your tobacco status. This is where independent agents earn our stripes: We can match you with a company whose policies favor your situation.
- General Health Questions: What kind of chronic diseases, if any, do you have?
- General Health History: Have you dealt with chronic health conditions in the past?
- Family Health History: What about the health histories of your immediate family members or distant relatives? They can give insight into your future health conditions.
- Occupation: Applicants with more dangerous jobs such as roofers and miners tend to pay more for coverage.
- Hobbies: If you’re a skydiver or a deep-sea angler on the weekends, an insurance company will usually factor these dangers into your premiums.
The Database Checks
Since you’re skipping the health exam with a simplified issue, your insurer won’t be checking your blood pressure and drawing blood for lab tests.
But your insurer will check some databases to evaluate you as an applicant and to corroborate your questionnaire answers:
- MVR Report: Underwriters will tap your state’s Department of Motor Vehicles’ database to find out about your driving record. More dangerous drivers will typically pay more in premiums.
- Pharma Reports: The insurance company can see your previous and current prescriptions. These give insight into your health conditions and compliance with doctor’s orders.
- MIB Reports: The Medical Information Bureau compiles your medical data from previous life insurance applications including past medical exam results.
This research sounds complex but it can happen very quickly — sometimes within one business day.
Decision Time
Most simplified issue insurers return one of three decisions:
- Approved As Applied: This is a best-case scenario. It means you’ll have coverage after a few formalities such as signing contracts and making the initial payments.
- More Data Needed: This decision isn’t really a decision. It’s just a request for more information. Typically you’ll get this response if your application contains conflicting information. You can provide more details to get the process back on track.
- Declined: This decision speaks for itself, and you may decide to move on to guaranteed issue policy. Working with an independent agency can prevent you from reaching this point because the agent won’t steer you toward a policy likely to decline coverage.
Guaranteed Issue Life Insurance
Guaranteed issue coverage resembles simplified issue but it’s even simpler — and your coverage probably will not exceed $25,000 to $35,000.
As the name implies, you’re pretty much guaranteed to get approval. You’ll still have to answer a few questions. The insurance company will want to know whether you have a terminal illness, for example.
The vast majority of applicants, however, will get approved for coverage, and they can keep the coverage as long as the premiums are up to date.
The guaranteed issue comes with a few limitations:
- Low Death Benefit: While you can find $25,000 or maybe even $35,000 in coverage, guaranteed issue policies average around $10,000. This level of coverage could help your family pay your final expenses or pay off a few small loans, but it won’t pay off a mortgage or fuel a trust fund.
- Graded Death Benefit: It’ll likely take two to three years for your entire death benefit to become fully available to your beneficiaries. If you died a year after buying the policy, for example, your family may be able to claim only half the benefit. They may receive only a return of your paid premiums.
- High Premiums: Despite these other limitations, you’ll still pay higher premiums compared with a simplified issue or medically underwritten options.
Finding the Right No-Exam Life Insurance
A question like “Do you use tobacco products?” on an insurance application seems simple enough, right? You check “Yes” or “No” and move on.
But checking “Yes” can mean a lot of things. It can mean you smoke a pack of cigarettes a day or it can mean you smoke one cigar while watching golf every Sunday afternoon.
And what about vaping, or smokeless tobacco, or even marijuana use?
More and more life insurance companies are making room for these gray areas, in both no-exam and traditional coverages.
Finding the company most likely to look favorably upon your personal gray area will be key to finding affordable and quality coverage.
We know the life insurance landscape and can help you find your niche.
Honesty is the Only Policy
It’s a common question: Can’t I just check the “No” box even though I smoke once in a while? After all, isn’t the spirit of the question what really matters?
This may sound like an elegant solution, especially if your tobacco status falls into a gray area, but it’s not. Bad things can happen when you aren’t 100 percent honest on a life insurance application:
- Insurance Fraud: This is a real crime that insurers take seriously.
- Loss of Coverage: Even if you avoid detection and pay lower premiums, your beneficiary won’t get the death benefit you’ve paid for if you die of a smoking-related disease or if an autopsy shows evidence of tobacco use.
Bottom Line: Exam or No-Exam, Coverage is a Must
There’s no doubt: Smoking complicates your life insurance picture. But with the right kind of guidance, you’ll be able to see through the haze to find the best possible options — both in quality and affordability.
Regardless of your tobacco status, you still need coverage for your loved ones who depend on you financially. Your life insurance coverage would help your family start rebuilding a new life as they deal with the grief of losing you.
Chances are you have more coverage options than you think. Just reach out and we’ll start the process of matching you with the right coverage.
