How smokers can save on life insurance

The insurance industry is skeptical about quitters



From the November 2014 issue of the magazine.


Benson & Hedges cigarettes (one carton)

Q: My husband and I have a 10-year term life insurance policy for $300,000 that expires this year. He quit smoking a week ago, and we’d like to renew using the lower rate for non-smokers, but they say he has to have quit for at least a year before we would qualify. Are there other options for us?—Mariska Walta

A: Quitting smoking is a big money saver for many reasons, including cheaper life insurance. A new term life policy for a smoker would cost your husband about $130 per month, compared to just $40 if he had been a non-smoker for at least one year, says Jason Conley, a benefits consultant at Rogers BenefitLink.

Unfortunately, you can’t go for a year without insurance. But you could get a smokers’ policy now, and then—after 12 months of smoke-free living—ask your insurance company for the lower rate. Email your agent to confirm that she or he is comfortable with this plan.

Be aware that the insurance industry is skeptical about quitters, and insurance companies will administer blood work to verify abstinence from smoking. “The number of folks who don’t make the year of non-smoking is huge,” says Conley.

So do everything you can to help your husband over the hump. It will be worth it for your term life insurance rates down the road, and more importantly, for his life itself.

Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal question? Write to Bruce at

One comment on “How smokers can save on life insurance

  1. Good article. I’d add a couple of points.
    1. The term “smoker” – and likewise, “non-smoker” in life insurance terminology, has morphed over the years since 1981 (when the distinction was introduced in Canadian life insurance pricing) to become a bit of a misnomer. By the criteria of some companies, “non-smoker” means a MINIMUM of 12 full months of total abstinence from any tobacco or related substance that would produce cotinine – along with good or better than average general health. Other companies would accept occasional tobacco consumption other than cigarettes (that term, “occasional” is also defined differently by insurance companies). Some companies have recently announced that they may go as far as to accept “occasional” marijuana smokers as “non-smokers” under certain (some disclosed and some undisclosed) criteria. (see also
    2. Making of an application to change from “smoker” to “non-smoker” rates carries some hazards, in particular relating to the statutory “contestability” clause that may re-start at the time of change. Note: misrepresentation, however “slight”, of tobacco or related substance consumption may render the policy and the coverage that it provides null and void.
    3. Insurance companies differ and vary in their pricing for “smokers” and “non-smokers”. In other words, an insurance company who may have had attractive pricing for “smokers” may be further down (less competitive) in price comparisons for “non-smokers” and vice versa. Per my second point above and beyond, in many regards, an application to change from “smoker” to “non-smoker” may be regarded as a new application for insurance from an underwriting standpoint. Therefore, it may be advantageous for the consumer to explore both options: a. Making application for a change from “smoker” to “non-smoker” rates, and b. making application for a “new” insurance policy. If the existing short-term policy (such as a 10-year term) is beyond its midpoint (beyond 5 years of being in force), exploration of the option to buy a new insurance policy at current rates may present additional advantages over the long term. Of course, each case has to and deserves to be examined on its own merits by an INDEPENDENT life insurance professional whose focus is on the best interest of the consumer, and who is not “tied” to selling the products of just 1, 2, 3, or 4 life insurance companies.
    4 Consumers also have the benefit of Canada’s free and most objective and comprehensive life insurance information and comparison resource, That free consumer info site is designed and maintained by consumers for consumers. It covers the largest number of insurance companies and products, does not attempt to sell anything, and it’s there for consumers to become better informed. The site also provides Canada’s largest free postal code based searchable database of consumer interest focused life insurance professionals coast to coast
    5. Other than Universal Life (aka “UL”), and for the most part, life insurance companies in Canada charge a rather high rate for the financing of life insurance premiums to be paid monthly instead of annually. The most common effective annualized rate is 18.6%. This is also reviewed at and in the link provided in that posting. Aside from saving on potentially avoidable high carrying (financing) charges, consumers may enjoy an added yet not immediately apparent added benefit by paying premiums annually rather than monthly. When the premiums are billed and paid annually rather than being deducted from the client’s account automatically, the agent/broker/advisor has an added motivation to contact the client annually prior to the anniversary date The WinQuote consumer info site displays the annual and corresponding monthly premiums along with the effective annualized financing rate for payment of premiums monthly. To the best of my knowledge, is the single and only life insurance related site that includes disclosure of the material element that is the effective financing rate for the payment of insurance premiums in monthly installments


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