Term life insurance rates are very inexpensive, but not as inexpensive when you smoke. The rates can be double what a non-smoker in similar health condition will pay. The good news is not all life insurance companies weigh tobacco use the same. If you only chew tobacco, or have the occasional cigar, some life insurance companies may offer you non-smoker rates. However, if you smoke a pack or two a day, you can’t avoid the smoker rating. Although you may have to pay life insurance rates based on your tobacco use, there is a big difference in the rates life insurance companies will charge you, with some companies charging almost twice as much as others. Here are 5 life insurance companies with low prices for a 20 year term life insurance policy for $500,000, for the two health classifications for a 21 year old male smoker.
Hopefully, if you have been discouraged from buying life insurance because you think you can’t afford it, this information will change your mind. If you still find these prices too costly, you can choose less coverage to reduce the price. The great thing about term life insurance is you can get whatever coverage fits your budget.
Male Age 21 Smoker Preferred Rates
I received these term life insurance price quotes through a term life insurance comparison quoting engine (many of these are available on the Web), and these rates, companies, or life insurance products may not be available in your state. Notice the life insurance companies with the lowest prices for smokers are a different group than the group of life insurance companies with the lowest rates for non-smokers, if you refer to my other blog post with the best life insurance rates for non smokers.
The Preferred rates are the lowest rates, and they are for people in exceptionally good health. So, if you are in great health — eat right, exercise, maintain a healthy weight, but you smoke occasionally — these are the prices you will pay, right? Not necessarily.
With auto & home insurance, agents usually qualify you for the rates you will pay at the time of application, and you start coverage with your first payment. Life insurance is different.
With life insurance, a good agent will estimate the rate you should pay based on your health information, then you complete and submit an application to the insurance company.
The insurance company reviews your application, orders additional information, like a paramedical exam, to determine if they want to insure you, and the rate to charge you if you are accepted.
You may appear to qualify for the lowest Preferred rates at the time of application, but you may be genetically predisposed to higher cholesterol than a normal, very fit person, and the policy will get issued at a higher rate, due to the paramedic exam results.
With auto & home insurance, it’s easy to shop based on price. With life insurance, it is near impossible to know the lowest term life insurance rates for you before your application is accepted.
Look how the competitive positions change for the insurance companies, if you qualify for Standard rates, instead of Preferred rates:
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Male Age 21 Smoker Standard Rates
Notice how Northwestern Mutual had the lowest annual premium at the Preferred class rate, but if you applied, and your policy is issued at the Standard class rate, Northwestern Mutual falls to number 3, at $60 more a year for annual premium than the lowest priced life insurance company. It turns out, Assurity has the lowest Standard rates. Should you turn around and apply to Assurity?
Each life insurance company has its own criteria for rate class placement, so you may qualify for Preferred with MTL Insurance Company, but only the Standard rates with Cincinnati Life. As you can see above, Cincinnati Life is not even in the top 5 insurance companies with the lowest term rates for the Standard health category. It is not possible to know for certain, prior to your life insurance policy being underwritten & issued, which health classification you will qualify for, with which insurance company.
You may have noticed the top term life insurance companies in each health category have rates close in price to each other, but there is a bigger difference in price among the health categories.
For example, Northwestern Mutual is $57.56 a month in the Preferred category, but is $72.92 for the Standard category.
This is why it’s best to use a good agent, because you can’t find the best priced term life policy for you without one. This is different than my advice about shopping for auto & home insurance.
A good agent will quote you an accurate term life quote at a competitive price, based on the agent’s knowledge of the rules of different insurance companies and you, your health, your family’s health history, & your habits. As I mentioned above, a good agent will know which life insurance companies will provide non smoker rates for some types of occasional tobacco use. Or if you have recently quit tobacco use, which life insurance company requires the shortest period of time from your last cigarette.
A bad agent quotes everyone preferred rates, or low rates they may not be likely to qualify for, after asking you few questions. A poor or inexperienced agent wants you to apply based on the low ball price, then they will explain & apologize for the much higher rate when the policy is issued, hoping you will pay it.
Look at the price difference between standard and preferred rates. Both of these categories are for healthy people. What if you have a minor medical condition, or you are overweight? A good agent knows the insurance companies with the best rates for certain health conditions, such as diabetes, or hefty people.
If you want low term life insurance rates, a good policy, and a smooth process getting the coverage you need, comparison shop with several agents, so you can find a good agent offering the best life insurance options for you at a competitive price. Term life insurance is affordable, even for smokers, and a good agent can make getting it easy for you.
Have you looked at term life insurance rates lately? Why not? Tell me about it. Please leave a comment on my facebook page. Or, you can e-mail me at help@smartshopyourcarinsurance.com if you have questions and would like my help. Follow me on Twitter for important insurance consumer news and new blog entries at CarInsWatch.