Planning on quitting? I’m going to show you how to get premiums comparable to non-smokers premiums. Safely, and effectively. And without buying less insurance to reduce the costs.

But before I do so, a warning. When applying for life insurance, never, ever omit any facts or bend the truth. Not even a little bit. It’s in your best interests to be blunt with the facts. Failing to do so can void your policy after your death. That’s right, you don’t find out until after your dead and the life company denies your family the claim. At which point there’s no backing up or fixing it.   

For the purposes of smoking, we’re going to be assuming vaping and tobacco. Marijuana smokers are a seperate class and I’ll discuss those in a seperate article. Note, if you mix tobacco with your marijuana, then you will be a tobacco smoker. Again, be direct and blunt when you inform the life company of your tobacco smoking habits.   

With the bad news out of the way, here’s the good news.

Smokers life insurance premiums in Canada are roughly double those of non-smokers. That’s not the good news yet.....

Here’s how you can get close to nonsmoker premiums, by taking advantage of explicit policy provisions available with some companies. The provision we care about is the exchange provision. This allows you to exchange your term policy for a longer term, as long as you do so in the first 5 years of the policy. You’ll need a company with this provision in order to enact the premium saving strategy I’m about to lay out.

First, decide on the term that you want, lets say a common 20 year term. Lets say premiums for nonsmokers are $50 a month, and yours, being a smoker, are $100.

What you can do is instead, purchase a 10 year term at smoker premiums – ensuring that the 10 year term has an exchange provision. 10 year term premiums are about half of what 20 year term premiums are, so now you’re down to $50/month.

At this point, you’ve got full coverage, at about the same premium as a nonsmoker. If you die, the company pays the claim because you actually have a valid smoker’s policy.

Then you need to quit smoking for one full year. Doing so qualifies you at nonsmoking premiums. Now at this point you can get your full 20 year term.

Once you’re non-smoking, apply to the company to requality at nonsmoking premiums. At the same time (many companies even use the same form for both changes), take advantage of the exchange provision and switch your policy to a term 20. Now you have a term 20 policy, at nonsmoking premiums – and more importantly in the year it took you to quit smoking, you’ve also saved about half your premiums.

This technique is valid and accepted in the life insurance industry, it’s a bit of extra paperwork shenanigans when you switch use the exchange provision, but that’s it. It also ensures that you save substantially on your premiums (roughly half) until you qualify at nonsmoking premiums, and does so in a way that allows you to properly disclose your tobacco consumption.