Why Is Life Insurance More For A Smoker?
To understand the answer to this question, it's important to understand what life insurance is and how a life insurance company determines rates (or prices) for their life insurance policies.
Life insurance is a financial product designed to protect an individual's family, business, or assets in the event of that individual's death.
The idea behind life insurance is that many people pay money in and only a few will ever take money out. If every one that purchased life insurance ended up getting a death benefit, then life insurance would not be a viable financial product for any company to sell.
By purchasing a life insurance policy, you are buying peace of mind. Most of us do not plan on dying during the period of the life insurance policy (unless it's a whole life or universal life policy that covers you until death), but instead buy a policy to give themselves and their families or businesses a sense of financial protection in the case of your death.
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Life insurance rates are determined by looking at the incidence of death in the population as a whole.
Life insurance companies hire actuaries (people skilled in evaluating statistical information) to look at mortality rates and to determine what the cost of life insurance should be so that the life insurance company can make money with their life insurance policies. They balance out the demands for lower prices (driven by consumer's willingness to pay coupled with the competitive landscape) and the company's need to make money. They also determine the types and quantities of people the company should insure (to make sure they are not only insuring people with a higher risk of death).
So, why is life insurance more for a smoker?
Science has shown that people who smoke generally pass away at a younger age.
While evaluating how much of a risk you are to insure, the life insurance company takes into account the fact that you smoke and the negative impact that smoking has on your life expectancy. Because you are a higher risk to insure (i.e. more likely to die sooner than someone who doesn't smoke) the life insurance company charges you more for your life insurance policy.
Unfortunate as it is, people who smoke will generally always pay more for their life insurance. But that doesn't mean you have to pay exorbitant prices if you are a smoker.
Consult with one of our life insurance specialists, and we will see if we can find a company that will give you rates that fit within your budget.
At Wholesale Insurance, we are committed to getting you the best prices available. Try us—you will like us. It's our Wholesale Life Insurance Guarantee!
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