Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey
They take your statement in good faith, if they find out postmortem that you innocently may have had your status as a smoker misunderstood. They would honor the policy but adjust the benefits according to the premiums that were paid. This would not be an issue that at the end of the contestable period would be grounds for contract rescission.
By the way it is "the use of tobacco products" within the 9 months prior to entering into the life insurance contract that constitutes a "smoker".
Most life insurance applications ask if you smoke. Depending on the size of the policy and the company, you may be asked to take a urine, blood, or saliva test. If you lie on an application and die within the two year incontestability period a company may question the issue based upon cause of death, and could either adjust the death benefit or refuse to pay the claim and refund the premiums paid depending on the circumstances.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
If there is any written medical record of your smoking, like your doctor's chart notes for example, chances are it will be in the MIB records. When you apply for insurance, you grant permission for an insurance company to check your medical records and other history and they may come across it there. Most all companies, if you are looking for best price will also test for nicotine in your system as part of the exam process.
Those companies that don't test, just factor it into the price. So you pay like you do smoke in those cases or somewhere close to.
One thing to keep in mind if you decide to miss the right answer when it comes to smoking is that some states refuse to let insurance companies settle a claim at a smoker rate. They have blocked insurance companies from paying the lesser claim and require the insurance company just to return premium. In the case of smoking, these states even waive the two year contestability window. Always check for any special state conditions when signing off on an application.
There are several ways that a life insurance company can know or learn that you smoke (what you smoke was not specified but we'll go for tobacco on this one).
1) Self Reporting - they ask you on your application if you are a tobacco user and, depending upon the value of the policy being applied for, may ask for fairly detailed information on your type and frequency of tobacco usage. So, to honestly complete the initial application the applicant themselves should be the person informing the insurance carrier about their tobacco use status.
2) Physical Exam - as a condition of your application you may be required to get a basic physical examination where things like height & weight can be verified and where, quite often, blood and/or urine samples are also taken to screen for health issues and to detect drugs such as Nicotine in the applicant's system.
3) Electronic Medical Records - most life insurance carriers will check your application's answers against information about you in the Medical Information Bureau. An indicated history of tobacco use when none is reported on the person's application would be an underwriting red flag. Also, information about whether you have been issued life insurance as a smoker, declined or rated as a smoker on a life insurance application can also turn up.
4) Leg Work - few of us will have this problem, but if you are applying for a really large amount of life insurance the insurance carriers may actually conduct investigations into an applicant's background and medical history. These may include interviews with friends and family. So, if they figure out you are really a Mafia boss rather than the president of the local trash company, your application for $50 million in coverage may get turned down.
To take out a life insurance policy as a non-smoker when you really are a smoker would be an act of fraud (a misrepresentation on the applicant's part). And even if you were to get issued at a non-smoker's rates that doesn't mean you are home free. Life insurance policies standardly have a two year contestability provision in them where the insurance company can terminate or adjust the policy if it can prove that you made any false statements on your application. But, if your misrepresentation about your tobacco use is determined to meet the legal requirements of fraud (pretty good chance they will) then the contestability period is indefinite.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
Well for one thing, in most cases there is a question on the application asking about the use of tobacco. Another way is that in many cases the subject will come up on a paramedic exam, which may also include the collection of blood and urine samples, which will show levels of nicotine etc. Records from your doctor will be ordered and reviewed by underwriting and they may identify you as a smoker.
President, Lane Independent Agency, Southern California
Each life insurance company is likely to perform a blood test before issuing life insurance. Certainly for any amount over 100k. That blood test will detect nicotine in the system for the past several months. If you say you never smoked, the test will not go back that far, but other records will and they may check those. Lying to a carrier will result in termination for material fraud, although that may only go back two years from the application in most cases. Even vapor smokes now in use, are testable and show nicotine. Had a client have his rates increased due to smoking vapors. Be honest and find a company you can trust. Thank you. GARY LANE.
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By the way it is "the use of tobacco products" within the 9 months prior to entering into the life insurance contract that constitutes a "smoker".
Those companies that don't test, just factor it into the price. So you pay like you do smoke in those cases or somewhere close to.
One thing to keep in mind if you decide to miss the right answer when it comes to smoking is that some states refuse to let insurance companies settle a claim at a smoker rate. They have blocked insurance companies from paying the lesser claim and require the insurance company just to return premium. In the case of smoking, these states even waive the two year contestability window. Always check for any special state conditions when signing off on an application.
1) Self Reporting - they ask you on your application if you are a tobacco user and, depending upon the value of the policy being applied for, may ask for fairly detailed information on your type and frequency of tobacco usage. So, to honestly complete the initial application the applicant themselves should be the person informing the insurance carrier about their tobacco use status.
2) Physical Exam - as a condition of your application you may be required to get a basic physical examination where things like height & weight can be verified and where, quite often, blood and/or urine samples are also taken to screen for health issues and to detect drugs such as Nicotine in the applicant's system.
3) Electronic Medical Records - most life insurance carriers will check your application's answers against information about you in the Medical Information Bureau. An indicated history of tobacco use when none is reported on the person's application would be an underwriting red flag. Also, information about whether you have been issued life insurance as a smoker, declined or rated as a smoker on a life insurance application can also turn up.
4) Leg Work - few of us will have this problem, but if you are applying for a really large amount of life insurance the insurance carriers may actually conduct investigations into an applicant's background and medical history. These may include interviews with friends and family. So, if they figure out you are really a Mafia boss rather than the president of the local trash company, your application for $50 million in coverage may get turned down.
To take out a life insurance policy as a non-smoker when you really are a smoker would be an act of fraud (a misrepresentation on the applicant's part). And even if you were to get issued at a non-smoker's rates that doesn't mean you are home free. Life insurance policies standardly have a two year contestability provision in them where the insurance company can terminate or adjust the policy if it can prove that you made any false statements on your application. But, if your misrepresentation about your tobacco use is determined to meet the legal requirements of fraud (pretty good chance they will) then the contestability period is indefinite.