Insurance Professional

Be Transparent about Smoking From Life Insurance Companies? What if you lied about your smoking habit on your life insurance application? And what happens if the insurance company finds out? How much do you have to smoke to even be considered a smoker? The answers might surprise you. Life insurance companies like their policyholders to be in good health. You're rewarded with lower premiums if you're super-healthy and haven't smoked in five years because that reduces your chances of dying soon. Being just "normally healthy" requires that you haven't used nicotine in the past three years and still gets you lower premiums. A standard rate requires that you have not used nicotine within the past year.

Who is Considered a Smoker? In the life insurance world, you're considered a smoker if you answer "yes" to the smoking question on your insurance application. If you're asked if you've used tobacco products, including cigarettes, cigars, and chewing tobacco, within the past three years — and you have — your answer should be yes (likewise for questions going back two years and one year). If you enjoy a good cigar from time to time or smoke just two cigarettes year, you are a smoker by insurance standards, even though the nicotine traces won't show up in your required urine test. How should the occasional smoker answer that question? You should probably let your conscience be your guide. Since smokers pay nearly three times the premium of nonsmokers, it's easy to see what motivates some people to lie on their policy applications.

You Can Sneak Through: With rates as competitive as they are, life insurance companies try to find out as much as possible about your health. Understandably, a nonsmoker's application is likely to be examined a bit closer than a smoker's, especially the results of the urine sample. However, it is possible for the nicotine level in a smoker's urine to be low enough to escape detection. In fact, according to a 1988 surgeon general's report, your body metabolizes, or breaks down, nicotine within 72 hours. The Centers for Disease Control and Prevention's Office on Smoking says that there's such a small amount of cotinine present in your body after three days that it's either not detectable or attributed to second-hand smoke. Cotinine is a primary metabolite of nicotine and is the most common identifier for nicotine levels in the urine. Therefore, even heavy smokers who can abstain for three days could theoretically lie about their smoking and go undetected.
Is It Worth It? So, if you "pass" your urine analysis, where do you go from there? It goes without saying (but we'll say it anyway) that you should not lie on your insurance application. The application you sign becomes part of your policy (you'll find it attached somewhere near the back), and the policy is a legal contract between you and the insurance company.
Consequences: Let's continue the scenario: Your urine sample doesn't show enough nicotine to prove you're a smoker, so your life insurance policy is issued at a preferred and/or nonsmoker rate. Then, the unthinkable happens: You die. Most life insurance policies carry a two-year "incontestable clause" that allows the insurance company to challenge a death claim. If you die within the first two years as a result of, say, a car accident, and it comes out that you were, in fact, a smoker, your insurer would have the right to "rescind" the policy or simply deny the claim. (Source: http://insurance.yahoo.com/lh/smoking.in.html)