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Are smokers eligible for term insurance?
Smokers are eligible for term insurance but their premiums will be higher due to increased health risks. The increase can range from 40-50% or more depending on various factors. It may be worth considering an additional term plan for those with large loans and family responsibilities.
As a smoker, am I eligible for a term insurance plan and what will be the quantum of increase in the premiums every year?
—Name withheld on request
If applicants for term insurance have used tobacco in any manner over the last 12 months, they are considered a smoker. It is important to note that the premium for a smoker will be higher than that for a non-smoker due to the increased health risks associated with smoking. The exact amount of premium increase will depend on various factors such as age, health condition, smoking habits, and the sum assured of the policy.
As a smoker, it is essential that you disclose your smoking habit truthfully at the time of application to ensure that your policy remains valid, and any claims made in the future are not rejected on the grounds of non-disclosure. If the medical reports are satisfactory, the insurance company may offer a term plan.
The increase in premium can range from 40-50% or more, depending on the insurer and the individual’s smoking habits.
I’m 35 years old and the sole breadwinner of my family, comprising my wife and two daughters. I earn ₹20 lakh per annum and recently purchased a house worth ₹1.5 crore. For this, I took a home loan of ₹1.1 crore. At that time, my bank relationship manager convinced me to buy a term plan for a sum assured of ₹1 crore. Should I opt for another term plan for additional safety?
—Name withheld on request
A term plan is a great way to secure your family’s financial future. It’s good that you have already purchased a term plan. However, given the size of your home loan and the responsibility of supporting your family, it may be worth considering an additional term plan. When deciding on the sum assured for the new term plan, consider factors such as your family’s current and future financial needs, any outstanding debts, and the impact of inflation on their expenses.
Ultimately, the decision to purchase an additional term plan should be based on your personal financial goals and circumstances.
Kamlesh Rao is MD & CEO of Aditya Birla Sun Life Insurance.
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First Published:18 May 2023, 12:56 AM IST
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