Depending on the type of tobacco or nicotine you use, life insurance underwriting can vary drastically from carrier to carrier. I’m talking about cigars, chewing and dipping tobacco, pipe, nicotine replacements (gums, patches, lozenges), and the newer E-cigarettes and vapor cigarettes. There are a few carriers are more relaxed than others with these different forms of tobacco and nicotine. When looking for life insurance for tobacco users, it is important to find this out before taking a life insurance application. Usually, the cheapest carrier on a spreadsheet has the most restrictive tobacco and nicotine guidelines.
Instead of asking a client if they smoke cigarettes, ask them if they currently, or in the last 5 years, use any form of tobacco or nicotine (or marijuana). Depending on the type, frequency, and past history, underwriting rates vary greatly from carrier to carrier. This can save a lot of time by hopefully applying to the most favorable carrier the first time.
Life insurers test for cotinine, which is a byproduct of nicotine. Cotinine stays in the system much longer. But there are levels that insurers are comfortable with and can offer nonsmoker rates. These client can test positive for, and admit to, other forms of nicotine and/or tobacco.
For example, a 45 year old male who chews tobacco could get nonsmoker rates. His premiums would be nearly half the premium of a cigarette user. But, 9 out of 10 carriers would view that same client at smoker rates. Knowing what carriers have the most advantageous guidelines for your clients can be confusing. The reason it is important to get this info from the client before taking an application is to avoid unnecessarily high premiums and avoid extra work. That savings in premium could allow your client to get the higher death benefit they need or free up money to get more insurance on the spouse.
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