Nicotine can be a drag on life insurance rates, no matter how you use it

No matter whether you smoke it, chew it, get it from a patch or take a drag from an electronic device or hookah pipe, tobacco use can be costly to your health and your pocketbook.

The toll smoking and other tobacco use can take on a person’s health is great. Tobacco use is the leading preventable cause of death in the U.S., causing about 443,000 deaths each year from 2000 to 2004, lung cancer alone accounts for 157,000 of those deaths, according to The American Cancer Society’s 2010 Cancer Facts and Figures. Thirty percent of all cancer deaths and 87 percent of lung cancer deaths are attributable to tobacco use. It is also a leading cause of cardiovascular and respiratory disease.

If you think electronic cigarettes are safer — think again. The U.S. Food and Drug Administration says electronic cigarettes also have cartridges filled with nicotine, flavors and other chemicals that are known to be toxic to humans. A recent FDA report pointed to diethylene glycol, nitrosamines, anabasine, myosmine and B-nicotyrine as sources of toxic chemicals found in e-cigarettes.

One chemical in particular, diethylene glycol, is an ingredient of antifreeze and a lubricant used in automobile brake fluid. In comparison, one cartridge of electronic cigarettes is estimated to have 18 mg of nicotine, while a pack of tobacco cigarettes has 20 mg, but the verdict is still out whether there are smoking cessation benefits to be found by switching to an electronic cigarette. Even hookah smoking, which is gaining popularity with the younger generation, may provide less of a nicotine count overall, but has a high concentration of carbon monoxide.

Whenever smokers light up, they are exposing themselves to more than 4,000 chemicals that make up the tar contained in a cigarette, according to the ACS. More than 60 of those chemicals are known to cause cancer. Some of the more lethal chemicals include cyanide, benzene, formaldehyde, methanol, acetylene (fuel used in welding torches) and ammonia.

Insurance companies and underwriters determine rates for smokers and other tobacco users by following the latest studies and mortality statistics provided from health organizations. For this reason, smokers pay more for life insurance premiums.  How high those premiums can get depends on what you smoke, how often you smoke and whether you are otherwise healthy. Rick Bergstrom, of Bergstrom Consulting in Seattle, says smoking especially affects term policy rates.

“When it comes to term policies, a preferred smoker (free of health conditions) would normally be rated almost double that of a preferred nonsmoker,” says Bob Bennethum, principal of The Producer’s Advantage Inc., an insurance broker based in Bingham Farms, Mich.

When it comes to whole life insurance, a smoker may be rated even more.

For instance, he says, a 45-year-old preferred nonsmoker with a 0,000 universal life policy with a lifetime guarantee would pay about ,550 a year for the policy. “The same policy would cost about ,400 for a preferred smoker,” he says.

If a smoker also has an illness aggravated by smoking, such as emphysema or coronary artery disease, they would be rated higher for smoking, higher again for the illness and higher again for the combination of the two, says Bill Tilford, principal of Tilford Consulting in Chicago.

Some insurance companies will give a break to the occasional cigar or pipe smoker, but only if they smoke about once a month or less, offering standard nonsmoker rates, and a  handful of companies that target rural areas will provide those same rates to those who chew tobacco, Tilford says.

But for the most part, regular smokers and other nicotine users will be rated either preferred smoker or standard smoker, no matter how they get their nicotine fix. The smokers’ age and length of time smoking could also make a difference between the two rates, underwriters say.

“Chewing tobacco is not as noxious as cigarette smoking, but you still are putting dangerous chemicals in your system. There are very few companies to my knowledge that will allow nonsmoker rates,” says Bennethum.

He says those who use a hookah pipe are smokers, as are those who wear a nicotine patch or chew nicotine gum.

“You may not using the patch or gum socially or recreationally, but even if you are trying get yourself off the nicotine habit it counts as tobacco use,” Tilford says.

Even so, if you are involved in a smoking cessation program it may be a good idea to let you life insurance agent know. Especially if you would like to convert your term life policy into a whole life policy. Depending on how long you have been successful in the program, this could result in lower rates.

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