You can’t argue with the facts. Fact #1: tobacco use is dangerous to your health. The Centers for Disease Control call tobacco use the single largest preventable cause of death and disease in the US.CDC claims cigarette smoking is responsible for over 480,000 American deaths a year. Yet despite all the evidence, over 42 million American adults light up and 33 million of them smoke daily. Fact #2: any habit that has a negative effect on your health is going to have a negative effect on your life insurance premiums. The actual impact of your tobacco use on premiums will depend on other factors including your age, general health and the type and amount of life insurance you’re applying for, but as a rule of thumb, you can count of paying almost four times more than non-smokers for life insurance.
So, if you’re a smoker in the market for a term or whole life policy and you want the cheapest life insurance possible, is switching to electronic cigarettes is the answer? Probably not.
Electronic cigarette and life insurance?
Electronic cigarettes, which deliver nicotine via inhaled vapor, have been around for years, but they really started to gain ground as the use of real cigarettes became increasing restrictive. Cigarettes, which have been banned in bars, restaurants, workplaces and on domestic flights for quite some time, are now being outlawed outright in some municipalities. The reason cited for the bans on smoking in public places has almost nothing to do with concern for the individual smoker’s health and almost everything to do with concerns over the impact of second-hand smoke. Since electronic cigarettes don’t generate smoke (or odor or ash), many smokers saw them as a great way to have their nicotine in a socially acceptable way. Consequently, the US e-cigarette market has ballooned from almost nothing in 2008 to $2.5 billion in annual sales in 2014, according to a Wells Fargo estimate. An estimated 3 million Americans are vapers, the term for e-cigarette users.
The problem, from an insurance underwriter’s point of view, is that e-cigarettes still deliver nicotine, which affects health, they produce formaldehyde, a known carcinogen, and it’s currently impossible to distinguish e-cigarette use from real cigarette use in the blood or urine tests life insurers typically use to find out if you’re lying about tobacco use on your application.
According to an article on BusinessWeek.com, life insurers don’t make much of a distinction between vaping and lighting up. They cite a May 2014 survey of 151 life insurance underwriters conducted by Munich American Reassurance Company that showed nine in 10 respondents considered e-cig users to be smokers. The same article posits that insurers will, for the time being, treat vaping with caution, partly because nobody has been using them for years so there are no conclusive studies, and partly because e-cigs deliver much higher doses of nicotine than regular cigarettes, which may increase the risk of high blood pressure and stroke
Where the FDA stands?
The Federal Drug Administration is currently trying to decide whether or not to treat e-cigarettes like regular cigarettes. The outcome will determine if e-cigs are classified as a tobacco product (which attracts new nicotine users) or a smoking cessation product (which helps become stop using nicotine). Either way, insurance underwriters may not care. An article on HuffingtonPost.com notes that insurers tend to lump users of nicotine patches, nasal spray or gum with traditional tobacco users. They quote insurance underwriter Mike Woods: “In order to qualify for non-smoker rates, the underwriting with most carriers is going to require you to be a full 12 months of no nicotine use at all.”
Bottom line, if you want to qualify for non-tobacco use life insurance rates, cold turkey is probably your best bet.