How smokers can save on life insurance

The insurance industry is skeptical about quitters

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From the November 2014 issue of the magazine.

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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 ask@moneysense.ca.

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