When it comes to applying for life insurance, many companies don’t see much of a difference between regular smokers and users of e-cigarettes. Although little is known about the effects of e-cigarettes, both products are seen as a health risk. Before signing up for a policy, it’s important to understand how e-cigarettes affect life insurance rates and how insurance companies tend to view them.
Smokers tend to pay three to four times more in premiums than non-smokers. In order to qualify for non-smoker life insurance rates, most companies will require their applicants to be completely nicotine-free for at least 12 months or sometimes 3 to 5 years, depending on the provider. Since e-cigarettes still give users a dose of nicotine, it’s hard for insurance companies to see a difference. Even if a person rarely smokes e-cigarettes, they may still be stuck with higher premiums.
Most insurance companies will test for nicotine during the required medical exam. From there, companies typically depend on the honor system when classifying their customers. Yet, this doesn’t mean that customers can simply withhold information about their past nicotine use. Insurance companies have many ways of digging up personal information. Evidence of past nicotine use can be found in a customer’s medical records, social media channels, public information directories, and even interviews with friends and family members.
In addition, most life insurance policies have a built-in two-year contestability window. If the company finds that the customer has falsified any part of their application, they can cancel the policy and return the premiums paid. Additionally, if the insured person dies within the first two years and the company finds out that the application contained false information, they can deny the claim.
As reported by The Hill, the Food and Drug Administration is currently in the process of trying to regulate all tobacco products, including e-cigarettes. If the White House rules in the FDA’s favor, vaporizers and electronic cigarettes would be held to the same standards as tobacco products. This ruling gives insurance companies all the more reason to raise premiums on their customers who regularly use e-cigarettes.
While the long-term effects of e-cigarettes may not yet be clear, what is clear is that E-cigarettes affect life insurance rates just like traditional tobacco products. If a person uses e-cigarettes as a way of weaning themselves off of tobacco products and nicotine altogether, they might want to wait another year or more before applying for life insurance to avoid paying higher premiums. Regardless of what kinds of nicotine products a person uses, it’s important for them to be honest with the insurance company to avoid penalties or having their policy canceled all together.
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