NEW YORK (CNN/Money) - Any smoker will tell you: using tobacco gets expensive. But it costs you in other ways than just the money you shell out for cigarettes or chew.
Tobacco users also pay more for life insurance than non-users do -- a lot more. Typically, a smoker pays twice the price a non-smoker pays for life insurance, according to the Consumer Federation of America.
But tobacco users should still shop around when looking for a policy. Each insurer puts a different price tag on tobacco use. And, although smokers will pay more than non-smokers, many insurers are willing to take the price down a notch for a smoker who's otherwise healthy. If you're acing your physicals every year, you have some bargaining power.
"It's crucial for smokers to comparison shop," said Jeanne Salvatore, vice-president of consumer affairs for the Insurance Information Institute. "If you're otherwise pretty healthy, that's especially true. You need to tell that to the insurance company to get the best possible deal."
Standard vs. preferred smoker rates
Someone who smokes or uses chewing tobacco but is otherwise healthy should look for an insurer that differentiates between "standard" and "preferred" tobacco users. You'll usually fall into a preferred tobacco user category if you are at a healthy weight, have a low cholesterol level and good blood pressure.
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"Most of our new products are divided into preferred and standard tobacco user categories," said Jim Weisman, a spokesperson for Baltimore-based Fidelity and Guaranty Life. "We don't differentiate between heavy and light smokers per se, but we do consider weight and blood pressure. How healthy those are will affect how much you pay."
At Atlanta-based ING Life Companies, for example, a 30-year-old male buying term insurance worth $250,000 and guaranteed for 20 years would pay an annual premium of about $1,050 -- if he's a standard smoker. But take the same man and put him in the preferred smoker category, and he pays a lot less, about $750 a year. (If he didn't smoke at all, by the way, he'd pay a fraction of the cost -- around $320 a year.)
Honesty (gets you) the best policy
In order to determine whether you're a tobacco user or not, virtually every life insurance company gives you a test that measures the amount of cotidine -- the major by-product of the body's absorption of nicotine -- in your urine or saliva. If the test is above a certain cutoff level, the individual is considered to be a tobacco user and is offered coverage at smoker rates, said Hank George, an expert life insurance underwriter.
"The test is very, very good, but not perfect," said George. "We keep a close eye on situations where insurance seekers test positive but steadfastly insist they are not smokers. In my experience, 9 times out of 10, the person did not tell the truth."
Though the staggering price difference between policies for smokers and nonsmokers might tempt some to lie about their habit, it's really not a good idea. Should you die and your heirs file a claim, the insurer could refuse to pay if your smoking history comes to light, said Jack Dolan, a spokesperson for the American Council of Life Insurers.
"Lots of people ask whether they should admit to light tobacco use," Dolan said. "But it's in your best interest to be up front with an insurer. You're already doing the right thing for your family by buying life insurance in the first place. You don't want to put your estate in peril by lying."
By the way, if you're the type who only smokes the odd cigar a few times a year, a few companies, such as ING Life Companies, may be willing to issue you coverage at non-smoker rates. You'll have to take the test and show that your cotidine is at the level of a non-smoker. Again, make sure to shop around. Not every company is willing to make this distinction.
Ready to quit?
If you have it in mind to stop, pick a company that lowers premium prices for people who kick the habit. Some companies will reduce your rates after you've stayed off tobacco for a set period of time, usually between 12 months and 3 years. With others, you're permanently stuck at a smokers' rate -- so make sure you ask.
"If someone quits, they can request a policy change," said Jim Livingston, senior vice-president of underwriting for ING Life Companies. "We generally require that the person hasn't used tobacco in the past 12 months."
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