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10 Tips for Smokers to Save Money on Life Insurance

Written by Cody Marchant

As a smoker, the rates you see up front for the average cost of life insurance might astound you. But don’t panic. There are plenty of ways you can save money as a smoker:

1. Shop Around First

Always get help from a third party broker or agent when comparing different companies. They are knowledgeable about which companies favor smokers or those with smoking related health issues. This information will come in handy when you are looking for the best possible price.

Comparing prices and policies is easy with our quoting tool. You can compare the best life insurance rates for smokers instantly to find the best coverage for you and your loved ones quickly and easily. We work with dozens of the best smokers life insurance companies and can help you find affordable coverage and policies that best fit your family’s needs.

2. Properly Estimate How Much Coverage You Need

Studies suggest that more than 75% of people with life insurance coverage overestimate their needs for life insurance coverage. While it is better to have it and not need it, you want to try and dial your coverage needs inaccurately in order to make sure that you are not overpaying for life insurance coverage.

Many companies recommend a salary-related method for calculating how much life insurance coverage you need, but this is proven to be inaccurate time and time again. The best way to understand how much coverage you need is to speak with an expert and explain to them your assets, liabilities, and financial goals for the future.

3. Consider Term Life Insurance Coverage 

Term policies are going to be the cheaper option, hands down. If you are looking at outrageously priced options for permanent policies, a long term policy could be your saving grace. Financially you could pay only thirty dollars per month where for a permanent policy you might pay three hundred dollars per month.

Unless you have a need for permanent life insurance coverage, term is probably a better fit for you and can save you thousands of dollars per year in the long run.

If you at the policy chart below you can see the increased cost difference between term and whole policies:

Age Policy Type $100,000 Male $100,000 Female $500,000 Male $500,000 Female $1,000,000 Male $1,000,000 Female
30 20 Year Term $20 $17 $72 $58 $136 $104
30 Whole Life $160 $136 $576 $464 $1,088 $832
40 20 Year Term $37 $33 $133 $105 $249 $201
40 Whole Life $296 $264 $1,064 $840 $1,992 $1,608
50 20 Year Term $80 $62 $327 $239 $622 $459
50 Whole Life $660 $550 $2,783 $2,156 $5,269 $4,059
60 20 Year Term $174 $135 $767 $547 $1451 $1,085
60 Whole Life $1,416 $1020 $5,724 $3912 $10,248 $7,344

4. Get a Life Insurance Policy at a Young Age 

Life insurance rates go up based on your age, so the earlier you purchase, the better the deal you will get. This is especially true if you lock in a longer term policy. If you are, for example, in your 30’s or 40’s you can lock in a term policy for 30 years and get a level premium.

But as you get older, the same lengths are no longer available to you. Most companies stop offering 30 year term policies once you reach your mid 50’s and they stop offering 30 and 20 year term policies once you reach your 70’s and older. So the earlier you get coverage, the cheaper it will be. Consider this chart below:

Age Policy Type $100,000 Male $100,000 Female $500,000 Male $500,000 Female $1,000,000 Male $1,000,000 Female
30 30 Year Term $29 $22 $115 $85 $218 $160
35 30 Year Term $35 $28 $145 $104 $275 $202
40 30 Year Term $52 $41 $216 $156 $425 $299
45 30 Year Term $84 $62 $347 $249 $687 $482
50 30 Year Term $116 $94 $530 $398 $1,050 $775

As a male locking in a 30 year term policy at 30, for $500,000 you will pay $115 per month for 30 years. Comparatively, if you wait until you are 35, that amount goes up to $145 per month for 30 years. Waiting ten years means you pay $216 per month for 30 years.

Locking in your term policy at 30 only costs $41,400 total for 30 years. Waiting 5 years raises it to $52,200. Waiting 10 years raises it to $77,760.

5. Disclose Health Issues Immediately

This is important. You won’t do yourself any good by trying to hide something. Firstly, chances are the thing you are trying to hide will be uncovered by the underwriting when they go over your medical records.

Secondly, you cannot get realistic quotes from your broker if you try to hide something like sleep apnea. There are many companies that offer favorable quotes for specific health issues, but the broker needs to know all of those health issues if they have any chance at finding the companies best suited for your situation.

Lastly, even if you do manage to obtain life insurance coverage by lying about your health, if you die from a health related condition that you did not report or lied about, your coverage can be voided. This is the last thing you want for your family in the event of your death.

6. Try to Find Guaranteed Level Term Premiums

If you opt for a term policy, review the fine print in search for a policy that offers guaranteed level term premiums. This means that the premiums you pay will remain exactly the same for the duration of your policy. Looking at the examples above, you can see how steeply prices rise based on age and if you fail to lock in a level premium, the company you use might increase the price corresponding to age brackets which will cost you much more in the end.

7. Pay Your Premium Annually if Possible 

Most companies offer a discount of 10% for those who pay annually rather than quarterly or monthly.

If you were to use the examples above and pay annually starting at age 30 instead of monthly, assuming you get a 10% discount from your company would result in pay $37,260 over 30 years. If you purchased a policy at age 35 you would pay $46,980 over 30 years. Taking out a policy at age 40 would result in paying $69,990.

8. Change Your Smoking Habits

If you want to get better premiums, consider changing your smoking habits. You don’t have to give up smoking entirely. Rather, reduce the amount that you smoke so that your habits are considered “recreational” and not “habitual”.

Many companies offer non-smoker rates to those who occasionally smoke or who use alternative tobacco products in lieu of cigarettes. Smoking results in an average increase of 342% in life insurance costs.

If you can make the choice to quit or at least try to reduce your dependence on tobacco, there are a few companies out there that will sign up up with a non-smoker rate class, and give you three years from the start of the policy to quit entirely. If you cannot do that, then at the three year mark you get to choose between a higher premium or lower death benefit.

9. Take a Medical Exam

A lot of people want to avoid the medical exam because of what it might disclose, but in reality, in very few situations will the information disclosed through a medical exam increase your costs higher than what you would be offered for policies with no medical exam.

The no medical exam policies should be viewed as a last resort only. In fact, if you undergo the exam, you can try to change your habits or health and re-take the exam 12 months later. Many companies will review the difference between your initial exam results and the 12 month mark. If there has been significant improvement, they might change your premiums.

10. Add Riders to Supplement Coverage Where Needed

This might be less expensive long term than the premiums are you are being charged. Below are some of the more popular ones:

Rider Features
Guaranteed insurability or renewal provision This benefit allows you to purchase extra coverage within the term of your policy without having to undergo additional medical exams. This is very beneficial if there has been a significant change in your circumstances such as a marriage or the birth of a child or your health has declined with age. In any of these situations, you can change the amount of coverage you have up or down without having to take another medical exam.

In some situations, this feature may end at a specific age.

Family income benefit In the event that you pass away this provides a steady flow of income to your family. Basically, your death benefit is set up so that instead of receiving a lump sum you determine the number of years you want your family to receive the benefit. The insurance company will disseminate the death benefit in the form of monthly income.
Accelerated death benefit This benefit means that you get to use part of your total death benefits if you are diagnosed with a terminal illness and given one or two years left to live. On average insurance companies will advance you between 25% and 40% of your total death benefit which is then subtracted from whatever is remaining. In some cases, there is no premium charge for this benefit or there is a very small premium charge. Make sure that you verify what is covered before you take this out. This can also be called a terminal illness benefit but each company has a different definition of terminal illness and might have a different definition of the amount of time you were given left to live before you can take out part of your policy.
Child term benefit This allows you to take out extra coverage for your children so that you get a small death benefit in the event that they passed away under the age of 18. Once your child turns 18 they typically have the option of converting their policy into something more permanent without having to undergo additional medical exams.

How to Find the Best Life Insurance Rates for Smokers 

Overall, these are the top 10 things you can do to save money on your life insurance as a smoker. If you try to implement all 10, or at least as many as you can, when looking for a new policy you can save hundreds of dollars per year. Remember that the biggest money saver is to quit smoking, or at least reduce the amount that you smoke. But if you cannot do that, or you are just not ready at this time, you still have options you can pursue.

Working with a third party agent is the best way to compare your life insurance options and ensure that you find the best coverage for you, and also that you save money on your policy. Our agents work with some of the best life insurance companies for smokers on the market, and can help you understand your coverage options and find the best coverage for you and your loved ones.

About Growth 360, LLC
About Growth 360, LLC

We work with individuals across the nation to secure the best life insurance rates.

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