Does Insurance Cost More if You Chew Tobacco?

It's no secret that smokers pay a higher insurance premium than non-smokers, all other factors being equal. What might not be as apparent are higher insurance rates for those who chew tobacco. While tobacco chewers might not be at the same level of risk as smokers for respiratory or other debilitating health conditions, insurance companies place all tobacco users -- including those who chew -- in the same smoker risk category and hit them with higher premiums. The amount of increase, however, will vary from insurer to insurer.

Do I Count?

Most life insurance companies follow a 12-month rule. If you have chewed tobacco in the last 12 months at the time you are applying for life insurance, you will be put into the same category as a smoker. Whether you chew tobacco occasionally or do it multiple times a day typically does not matter. If you used tobacco in a 12-month time period, you are considered a smoker risk and will face a higher premium than non-smokers.

The Reasoning

Life and health insurance companies charge higher premiums for chewing tobacco users because of their increased health risk. According to the Centers for Disease Control and Prevention, tobacco use kills more people than the combined total of people killed by human immunodeficiency virus (HIV), illegal drug abuse, alcohol abuse, motor vehicle injuries, suicides and murders. Chewing tobacco can cause cancer and increased risk for sudden death from ventricular arrhythmia, which is when the heart pumps little or no blood throughout the body. As such, insurance companies charge higher premiums.

Life Insurance Premiums

For term life insurance policies, which cover a specific time period, chewing tobacco users can expect to pay as much as 3.8 times more than non-smokers. Whole life insurance policies, which cover a person’s entire life, also have increased rates for smokers and chewing tobacco users. Other factors, including your age and general health, and the amount of life insurance you want, will also affect your premium.

Health Insurance Premiums

Tobacco use costs the U.S. economy nearly $200 billion every year in medical costs and lost productivity, according to an article by Craig Guillot and John Egan on the InsuranceQuotes website. The impact on health insurance companies is that they must pay out more money for tobacco users. Before 2014, many tobacco users who had group health insurance coverage, usually from their employers, were buffered from the premium hikes given to smokers who pay for their own individual health insurance. But starting in 2014, due to the Affordable Care Act, employers can assess a 50 percent insurance surcharge on employees who use tobacco. Even before then, about 64 percent of U.S. employers were already hitting tobacco-using workers with a health insurance surcharge and nine states imposed higher health insurance premiums on state employees who smoked.

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