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Term Insurance Plan For Smokers in India

Term Insurance Plan For Smokers in India

Term Plan for Smokers

Smoking is injurious to health is one slogan we see everywhere. It is not only harmful to health but also burdens people’s finances. And yet, it’s a habit not many find easy to kick. Smoking and secondary smoking can cause a range of respiratory illnesses, affect your quality of life and in many cases, lead to cancer. According to the WHO, tobacco is the cause of over one million deaths every year in India (1).

Impact on premiums

In the wake of the negative impact of smoking, how do insurers look at this harmful habit? Typically, smokers would need to pay a higher premium than those who don’t smoke when they buy a term plan. The reason is simply that smokers have a greater rate of mortality than non-smokers.

If a 40-year-old opts for a term insurance plan for a sum assured of Rs 1 crore, and is a fit and non-smoking male, the premium paid for a term of 20 years is just over Rs 800 monthly. However, for a smoker of the same age, this number may go up to Rs 1,000 per month. Just as age and gender make a difference to premium payments, so does smoking or non-smoking.

Who is a smoker and how are smokers categorised by insurers?

There are three categories that insurers go by. A typical smoker is one who is a smoker with some minor health issue. A preferred smoker is one who is a smoker but is otherwise fit and in good health while a table-rated smoker is one who has a significant physical issue. The insurer takes a call on the premium charged for the term plan, based on the individual’s habits.

Insurers may ask questions pertaining to the individual’s smoking habits. Anyone who uses tobacco or nicotine in their various forms, including cigars, cigarettes, beedis, nicotine patches, pan masala or khaini, among others is considered a smoker for the purpose of insurance. Questions pertain to which product an individual may use and the frequency of use.

If an individual develops the smoking habit after opting for the insurance plan, it is important to update the information to the insurer because withholding information may have consequences such as termination of policy or pressing of charges for scamming.

How does term insurance work?

Before one opts for insurance cover, it’s important to understand the concept of term insurance. A term plan is among the most popular types of insurance plans because it allows an individual to choose a term or a timeframe for coverage. In the unfortunate event of the individual’s death during the term of the insurance plan, the benefits are paid to the nominee. The reason term insurance is popular lies in its simplicity of structure. All you need to do is pay your premium at specific intervals and seek coverage for the term you have chosen. That’s why it is called a pure protection plan. It is different from other traditional insurance plans because there are no maturity benefits involved.

Another reason a term plan is popular is because it is more affordable than traditional insurance plans. The premium you pay is much lower than what you pay for other traditional insurance schemes. Also, there is flexibility involved -- your policy ends if you wish to exit it. All you would need to do is stop making premium payments. A term plan also comes with riders, which are essentially add-ons that protect you further from certain critical illnesses, disability, accidental death, inability to pay premium owing to financial constraints such as a job loss. There is even a monthly income rider that the family can avail of in the case of the insured person’s death. A term plan allows for tax deductions on premium paid under Sec 80C. If you have opted for a health rider such as critical illness, you can avail deductions under Sec 80D.

In conclusion

If you are a smoker and want insurance, you should do your research and pick a term plan that offers a range of riders to choose from, apart from the option of choosing sum assured, term of the policy, premium payment terms and mode of payment. You will be asked questions on your lifestyle, health, age and gender before a quote is generated. You would need to remember that the age at entry should be 18 years or above, while the age at maturity should be at least 28 years.

Choosing the iSelect Star Term Plan from Canara HSBC Oriental Bank of Commerce Life Insurance ensures affordable cover, option of adding spouse to the same policy with discount, and multiple premium payment options. What’s more you can buy online anytime, thanks to a seamless and efficient interface.

Speak to an insurance specialist now!

Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance plan doesn't offer any payout after maturity or expiration date

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance plan riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term insurance plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while Buying the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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