Know the Hidden Cost of Tobacco on World No Tabacco Day

Written by : Knowledge Centre Team

2025-05-29

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As May 31st approaches, World No Tobacco Day reminds us of the ongoing harm tobacco causes, not just to our health, but to our finances too. In 2025, the World Health Organisation's theme, "Unmasking the Appeal," aims to bust common myths around tobacco use.

While the health risks of smoking are well known and popularly discussed, many people overlook how it affects their financial planning. At Canara HSBC Life Insurance, we help you identify and address these hidden gaps. This World No Tobacco Day, let’s take a closer look at the picture and understand how insurance premiums for smokers are impacted, adding to the hidden cost.

Key Takeaways

Quitting tobacco improves health and reduces insurance costs.
WHO’s 2025 theme for World No Tobacco Day focuses on exposing the marketing strategies.
Tobacco use affects premium rates and delays key policy benefits.
Post-quitting, premium reassessment is possible, ensuring lowered insurance costs.
Tobacco users must disclose usage to avoid claim rejection.

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Why We Need to Talk About Tobacco in 2025?

Every cigarette you smoke or tobacco you use today shapes tomorrow’s statistics. Globally, tobacco still claims over 8 million lives each year. Unfortunately, another 1.3 million suffer the same due to exposure to second‑hand smoke.

According to reports, youth above 15 years of age account for an estimated 253 million tobacco consumers. While this is quite an alarming number, the overall reports issued by WHO hint toward a gradual decline.

Counting healthcare costs and lost work, India's economy suffered a ₹1,773.4 billion setback in 2017-18. Even as overall smoking prevalence dips, the introduction of flavoured e‑cigarettes has reversed youth gains. The Global Youth Tobacco Survey-4, done in 2019, suggests that 2.8% of adolescents consume e-cigarettes.

These numbers underscore the urgency of “Unmasking the Appeal” and explain why insurers factor tobacco use into premium calculations.

Did You Know?

A UN report shows that tobacco use in India is projected to fall 43% (38.3% to 21.8%).

Source: TOI

Historical Overview of World No Tobacco Day

Since the first World No Tobacco Day, its themes have evolved from a simple act of spreading awareness to a complex global movement. Here’s how each milestone in its history reflects shifts in policy, science, and public awareness:

Origin- The concept originated in 1987 when the World Health Assembly passed Resolution WHA40.38. It designated a single day for tobacco abstinence in April 1988. A year later, Resolution WHA42.19 moved the observance to May 31, thereby solidifying its place on the global health calendar.
Annual Themes- Each year brings a fresh focal point. In 1998, the emphasis was on going tobacco-free. By 2017, the spotlight had shifted to tobacco being a threat to sustainable development. Recent themes have targeted industry tactics (2020) and the environmental impact of tobacco cultivation (2023). This thematic evolution mirrors the growing complexity of tobacco control.
Purpose- At its core, World No Tobacco Day aims to identify how tobacco attracts the youth and, accordingly, take action. It exposes industry tactics, educates the public on health and economic consequences, and drives policy changes that protect future generations.
In 2025, “Unmasking the Appeal” will continue this tradition by revealing how flavours, packaging, and digital marketing hook users. More importantly, those choices ripple into higher insurance premiums for smokers and diminished long‑term savings.

How Does Tobacco Use Impact Your Insurance Plan?

Understanding the correlation between tobacco use and insurance is essential for anyone who smokes or uses other tobacco-based products. Of course, quitting remains the best path to improved health and lower costs. However, knowledge of how, as an insurance buyer, assessing your tobacco habits can help you select or renew a suitable policy.

Here, we unpack the three key dimensions that every tobacco user should know:

Accessibility- Securing health insurance as a tobacco user involves more strict underwriting requirements than those for non‑users. During the application process, insurers typically ask detailed questions about your tobacco history, including:
- Type and Frequency of Use: Whether you smoke cigarettes, cigars, or use chewing tobacco, providers need to understand your consumption patterns.
- Duration of Usage: The number of years for which you have been using tobacco products can affect how underwriters view your long‑term risk.
- Attempts to Overcome: Evidence of efforts to quit tobacco, such as enrolment in a nicotine replacement programme or attendance at counselling sessions. These things, especially during the assessment of insurance premiums for smokers, demonstrate proactive health management, thereby making more favourable plans accessible.
  
  Note: Failure to provide accurate information can result in claim denial or policy rescission. Therefore, transparency at the outset paves the way for smoother access to coverage.
  
  Example: Ravi, a 35‑year‑old IT professional in Bangalore, disclosed use of chewing tobacco during his life insurance application. He had no other health issues. While his transparency helped in quick approval, the underwriting process was stricter. He was eligible only for limited-term plans.
Premiums- Tobacco use is closely tied to higher healthcare costs over a lifetime. As a result, insurers levy additional charges, often called a “tobacco rider” or “smoker surcharge”, to offset the elevated risk. Key considerations insurers look at while deciding insurance premiums for smokers are:
- Policy Term Impact: Longer-term policies, such as 30‑year term plans, tend to magnify the cost differential because the probability of tobacco‑related health events increases with time.
- Renewal Rates: Some policies apply annual premium adjustments based on tobacco status. Once medically confirmed that you have stayed tobacco-free, the extra charge can be lowered or dropped when you renew.
- Percentage Loading: Premiums can be 25% to 100% higher than those in life insurance for non-smokers. It also varies depending on age, gender, and product type. This means your insurance premium will be comparatively above standard rates.
  
  Employers and group schemes also tend to negotiate lower loadings for tobacco users if workplace wellness programmes demonstrate sustained quit rates among participants. Thus, proactive engagement in cessation initiatives can translate into meaningful savings on your premium outlay.
  
  Example: Priya, a 28‑year‑old teacher in Delhi who quit smoking two years ago, had her smoking load reduced by providing proof of zero cotinine tests. This way, she was able to reduce the premium compared to smokers.
Eligibility- Tobacco usage can affect not only the cost of your coverage but also your ability to qualify for certain policy types. Underwriting guidelines may include:
- Waiting Periods: Some plans impose a waiting period, often two to three years before tobacco users can claim benefits related to tobacco‑linked illnesses.
- Product Restrictions: High‑coverage sum‑insured plans or those with comprehensive critical illness riders might exclude tobacco users entirely or limit benefits for tobacco‑related conditions.
- Age Thresholds: Older applicants who use tobacco face compounded scrutiny, as age and smoking together elevate mortality and morbidity projections.
  
  Despite these hurdles, many insurers offer specialised “tobacco user” products designed to balance affordability and adequate coverage. Exploring these tailored options, along with demonstrating a real commitment to quitting, improves eligibility to secure a policy that meets both your health and financial needs.
  
  Example: Consider someone in their early 30s who reports occasional tobacco use on their insurance form. Transparency here might actually work in their favour, allowing the insurer to personalise coverage instead of declining it. It also sets a foundation for easier policy upgrades later.

What are the Insurer Risk Assessment Strategies?

While offering coverage is beneficial for the policyholder’s loved ones, in the case of tobacco users, insurers still prefer a close assessment of all areas. Their goal is to balance risk pools and ensure that premiums accurately reflect expected claim costs. Their key strategies include:

Detailed Questionnaires and Declarations- Applicants must provide granular information on frequency, duration, and type of tobacco product used. A clear declaration minimises hassle-free selection and keeps schemes favourable.
Medical and Biochemical Testing- Beyond self‑reporting, insurers may request cotinine or carbon monoxide tests to validate smoking status. Such objective markers help underwriters differentiate between casual experimenters and habitual users.
Dynamic Underwriting Models- Advanced analytics incorporate demographic data, health indicators, and quitting history into real‑time risk scores. This allows insurers to tailor the insurance premium for smokers based on individualised risk rather than broad age‑band surcharges.
Wellness Programme Linkages- Integration with corporate health initiatives or standalone cessation programmes provides data on participants’ progress. Regular feedback on reduced cotinine levels can trigger mid‑term premium discounts or surcharge waivers.
Claims Experience Monitoring- Historical claims data for tobacco users illuminate patterns, such as the frequency of respiratory and cardiovascular claims, that provide feedback into future premium calibrations.
Tiered Product Design- Some insurers offer distinct products for tobacco users, with adjusted coverages and benefit structures. In contrast, life insurance for non-smokers retains cleaner risk profiles and more generous benefit matrices.

What are the Benefits of Quitting Tobacco for Insurance Holders?

For policyholders, ceasing tobacco use unlocks both immediate and long‑term advantages. Beyond obvious health improvements, quitting reshapes insurance premiums for smokers and tobacco users in ways that compound over time:

Lower Premiums- Tobacco users typically pay a loading surcharge, often 25 to 100 per cent above base rates. After 12–24 months of verified abstinence, many insurers permit reclassification to non‑smoker status. This dramatically reduces your insurance premium for smokers to levels comparable with life insurance for non-smokers.
Broader Product Access- Smokers may face restrictions on high‑sum‑insured or limited‑term policies. Ex‑smokers regain eligibility for richer benefit options, critical illness riders, and longer-term spans, aligning coverage with evolving life stages.
Faster Underwriting- Underwriters expedite applications for individuals who have sustained tobacco‑free periods. Medical examinations may be streamlined, reducing time to policy issuance.
Enhanced Renewal Flexibility- Many contracts feature clauses allowing mid‑term premium adjustments. Demonstrated commitment to quitting can trigger immediate premium relief rather than waiting for policy anniversaries.
Psychological Assurance- Seeing your premium become affordable as you stay smoke-free motivates you to keep making healthy choices and stay on budget. By quitting, you don’t just extend your life expectancy. You also optimise your insurance portfolio, converting the act of giving up tobacco into a tangible fiscal benefit.

How Does Life Insurance of Non Smoker and Smokers Differ?

The following table highlights the principal distinctions between standard non‑smoker policies and those specific for tobacco users:

Criteria	Non‑Smoker Policy	Smoker Policy
Base Premium	Lowest risk class; standard age‑band rate.	Charged a loading of 25 – 100 per cent.
Underwriting Requirements	Basic health questionnaire.	Detailed smoking history and biochemical tests.
Policy Eligibility	Broad access to all term and whole life plans.	May be restricted to specific products.
Riders and Add‑ons	Full suite of critical illness, waiver of premium, and accidental death.	Limited rider availability; higher cost.
Renewal Terms	Premium stability and possible loyalty bonuses.	Higher renewal rates and fewer loyalty benefits.
Conversion Rights	Often extendable to permanent plans without further medicals.	Conversion usually requires fresh medicals.
Reclassification Opportunity	Not applicable.	Possible after 12–24 months of abstinence.

Even a marginal difference in risk translates into significant financial divergence. For example, a 30‑year‑old non‑smoker purchasing a ₹1 crore, 20‑year term plan might pay ₹10,000 annually.

Conversely, a smoker in the same bracket could face premiums upward of ₹18,000. Should that smoker quit and validate their abstinence, they can petition to reclassify, potentially restoring the ₹10,000 rate. This demonstrates the dual value of better health habits: life‑extending and cost‑saving.

What are the Actionable Tips for Tobacco Users?

Setting the foot in the right direction always takes courage. You may undergo physical and psychological withdrawal symptoms. However, you can embrace your journey to a healthier and wealthier life with these pragmatic steps:

Set a Quit Date and Plan- Choose a realistic date within the next month. Identify triggers, such as stress or social settings, and devise alternatives, like chewing sugar‑free gum or brisk walks.
Leverage Cessation Tools- Nicotine replacement therapies, prescription aids, and behavioural counselling boost success rates. Wherever available, enrol in insurer‑sponsored digital programmes that can earn you mid‑term premium rebates.
Monitor Biomarkers- Regular cotinine or breath‑CO checks provide tangible proof of progress. Share results with your insurer to unlock programs that may reduce your insurance premium for smokers even before full policy renewal.
Review Your Policy- Understand your contract’s “quit‑and‑save” clauses. Some term plans allow a reclassification to life insurance for non-smokers after 12–24 months of verified abstinence, yielding substantial cost savings.
Adopt a Heart‑Healthy Lifestyle- Incorporate moderate exercise, a nutrient‑rich diet, and stress‑management techniques (e.g. yoga or mindfulness). These measures not only aid in nicotine withdrawal but also improve your overall risk profile.
Engage with Support Networks- Enlist family, friends, or peer support groups. Accountability and emotional reinforcement heighten long‑term success.
Plan the Finances Smartly- Calculate the savings from lower premiums and earmark them for health check‑ups or increased coverage. Visualising the financial gains can reinforce your motivation to remain tobacco‑free.
Stay Informed- Keep track of new insurance products tailored for recent quitters. Some insurers periodically launch offers for ex‑tobacco users, featuring competitive premiums and flexible underwriting.

Conclusion

As someone who understands the long-term costs of tobacco, both to health and to finances, quitting is a personal win and a smart financial move. At Canara HSBC Life Insurance, we are committed to supporting your healthier lifestyle choices with top coverage plans.

Whether you're rethinking your premiums or looking for plans tailored to your current health, we're here to guide you every step of the way. Let’s make this World No Tobacco Day 2025 a milestone towards a smoke-free life and a stronger, more secure financial future.

Glossary

Cotinine Test: A lab test is used to detect nicotine presence in the blood and assess tobacco use.
Underwriting: The insurer’s process of evaluating risk before issuing a policy.
Non-Smoker Classification: Insurance status for individuals who haven’t used tobacco for 12–24 months.
Policy Reclassification: Change in insurance status from smoker to non-smoker after verified abstinence.

FAQs

Concealing tobacco use can lead to claim rejection due to non-disclosure or misrepresentation during the application.

No, most insurers treat all forms of tobacco, smoking, or smokeless as part of the same risk category.

It may, depending on your policy’s terms. Some insurers offer lower premiums upon verified tobacco abstinence.

Tobacco users may face restricted access, higher premiums, or longer waiting periods in critical illness plans.

Yes, it may reduce health complications and hence improve both claim acceptance and settlement timelines.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.