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Does Smoking E-Cigarettes Raise Your Life Insurance Premium?

As any tobacco smoker who’s ever applied for a life insurance policy can tell you, most insurance companies charge higher premiums for smokers. Occasionally, someone who smokes a cigar once or twice a month can get a Preferred Plus rate – meaning they pay the same premium as a healthy non-smoker. For the most part, however, the health risks associated with smoking cigarettes, E-cigarettes, cigars and pipes are viewed by underwriters as sufficient grounds for charging up to 50 percent more in life insurance premiums.

Is Smoking an E-Cigarette Considered Smoking?

But what about people who use e-cigarettes? Marketed as a way to quit smoking, e-cigarettes have grown into a multibillion-dollar industry since their introduction to the US in 2007 – and are currently being used by one in 10 Americans, according to a 2015 study by Reuters. Since these battery-powered devices transform liquid nicotine into a water-based vapor, they are perceived by many as a healthier alternative to tobacco products – which produce a toxic smoke that increases lung cancer and emphysema risk not only for the user but for those in the user’s immediate vicinity.

For the Majority of Life Insurance Companies, Smoking Is Smoking

Despite evidence to the contrary, most insurance companies are unwilling to view e-cigarettes as a healthier alternative to smoking tobacco. A May 2014 study by Munich American Reassurance Company indicated that nearly 90 percent of life insurance underwriters consider an e-cigarette user to be a smoker. Of the 40 percent who claimed that their insurance companies actually had underwriting policies for e-cigarettes, more than 80 percent classify them as a tobacco product.
Several factors account for this perspective. E-cigarettes are still unregulated by the FDA, and their long-term effects on the health of regular users have yet to be seen. Furthermore, the same Reuters study cited above indicates that at least 75 percent of people who use electronic cigarettes or other vaping devices continue to smoke traditional tobacco products – which doesn’t exactly support the claim that e-cigarettes help you stop smoking. The final issue is related to nicotine. While those who exclusively smoke e-cigarettes will likely mark “no” on a life insurance application asking if they use tobacco products, they’ll test positive for nicotine when they eventually undergo the mini medical exam required to apply for any term life insurance policy. The vast majority of underwriters use nicotine as the primary determinant for classifying an applicant as a smoker. So if you have nicotine in your system, chances are you’re going to get stuck with a higher premium.

Exceptions to the Rule

Just as certain life insurance company underwriters will allow Preferred Plus rates for occasional cigar smokers, it’s technically possible for e-cigarette smokers to qualify for non-smoker rates – provided they haven’t smoked regular cigarettes in the past 12 months. Because the Federal law doesn’t include vaping in its definition of tobacco use, a handful of long-term care and health insurance companies don’t consider e-cigarette users to be tobacco users. As more information is gathered about the long-term effects of e-cigarettes, life insurance underwriting may follow the lead of these long-term care and health insurance companies – and a day may come when vaping won’t necessarily lead to higher premiums.
For more information about how smoking can determine your underwriting class and life insurance premiums, visit https://www.selectquote.com/blog/2016/05/06/what-you-need-to-know-about-underwriting-class-and-your-life-insurance-premium/.

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