Will Smoking, Vaping, Or Cannabis Use Raise My Rates?

We all know that rates are generally higher for people who smoke, vape or use cannabis. The real question is how much higher is the rate and what is considered "usage". Of course, each company has its own underwriting guidelines, but for this article, let's just consider a general overview.

Insurance carriers use statistical data to view these habits through the lens of mortality risk, and the difference in premiums between a "Smoker" and a "Non-Smoker" rate class can be substantial—often doubling or tripling your monthly costs.

1. Traditional Smoking (Cigarettes)

This is a straightforward baseline. Smoking traditional cigarettes will automatically place you in a "Tobacco/Smoker" rate class.

• The Cost: Expect to pay 200% to 300% more than a non-smoker of the same age and health profile.

• Getting Non-Smoker Rates: Most carriers require you to be completely nicotine- and tobacco-free for at least 12 months to qualify for standard non-smoker rates, and up to 3 to 5 years to qualify for "Preferred Plus" tiers.

One thing that comes up here is occasional usage. Some people will only smoke a cigarette two or three times a month, usually in a social situation. Some folks will enjoy a cigar once or twice a month. These people assume that they aren't tobacco users, but the company might not agree. 

2. Vaping and E-Cigarettes

Even though vaping doesn't involve burning tobacco leaf, the vast majority of life insurance companies treat vaping exactly like cigarette smoking.

• Nicotine Factor: If your vape liquid contains nicotine, a routine medical exam will detect cotinine (a byproduct of nicotine) in your system, triggering tobacco rates.

• Nicotine-Free Vaping: Even if you vape nicotine-free liquids, many carriers will still classify you as a smoker because it's difficult to prove the absence of nicotine historically, and the long-term health data on vaping is still being evaluated. A select few carriers may offer non-tobacco rates if you can prove a clean lab panel, but they are the exception. 

  

3. Cannabis Use

The insurance industry’s view on marijuana has softened significantly over the last several years, but underwriting still varies wildly from company to company.

• Frequency Matters: Occasional recreational users (e.g., once a week or a few times a month) can frequently qualify for Standard Non-Smoker or even Preferred rates with specific carriers, provided there are no other health or lifestyle risks. Heavy or daily use will usually push you into a smoker tier or a rated (higher cost) category.

• Method of Consumption: Edibles and oils are sometimes viewed more favorably than smoking or vaping cannabis, as they don't carry the respiratory risks associated with inhalation.

• Medicinal vs. Recreational: If you have a medical marijuana card, underwriters will look closely at the underlying health condition you are treating rather than just the cannabis use itself. Some people feel that if they state that they use cannabis for medical purposes, that it somehow makes it more "legitimate", but it can often make the price higher or even result in a "decline". This is because the carrier will want to know what illness is being treated with the marijuana, which can open a whole new can of worms.

The good news is that many insurance companies will offer a "reconsideration" clause. For example, if you quit smoking and are nicotine free for 12-24 months (depending on the carrier), they will adjust your rates downward. 

Each insurance company has their own guidelines. Some are more "lenient" than others, either not considering an occasional cigar an issue or have lower "smoker rates". This is where using an independent insurance broker shop your case around can be better than using an agent who only has one carrier at their disposal.

If you need life insurance to protect your family but are concerned about how much it will cost due to smoking, vaping or cannabis usage, give our life insurance quoting tool a try. And if you have questions, please reach out to us.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

Do I Need A Medical Exam To Purchase Life Insurance?

Over my 25+ years selling life insurance I have had a lot of people ask me about medical exams. "Who pays for the exam?" and "will needles be involved?" seem to be a couple of the biggest concerns. Over the years, exam requirements have changed, so let's take a quick look and see what the medical exam is all about.

The process starts when an application is completed. If an exam is required, the agent will contact an approved paramed exam company and have a nurse schedule a time to meet with the insured at their home or work. The insurance carrier pays for the exam which is good. 

When the nurse arrives they will have all the supplies they need, including devices to check blood pressure, height and weight. More than likely they will need a urine sample and some blood to send back to the lab. Drinking plenty of fluids beforehand can make that part a lot easier and less time consuming.

Years ago, I had a client who was deathly afraid of needles, thus making her blood pressure spike. Trying to convince an underwriter that the client's blood pressure was usually normal was fruitless. We eventually took the business to another carrier that didn't require an exam.

One of the more important factors of whether there will be an exam or not is the face amount of the policy someone is applying for. Some companies will require an exam for policies over $100,000, but we have one carrier who doesn't require an exam for policies (term or whole life) below $250,000. Instead they will just require medical records. Rest assured that a $1 million policy will require an exam.

An interesting point here is that insurance companies that don't require an exam may have higher premiums. This is because they recognize that they aren't all the information necessary and pass that higher risk on in the form of premiums.

During the COVID epidemic, clients didn't necessarily want nurses (who apparently had visited other people) in their homes. Many insurance companies adjusted and cut down on the exam requirements.

Another factor is that AI is now being used more by analyzing medical records. This has sped up the underwriting process but there is still room for improvement when it comes to accuracy.

Don't let a fear of needles prevent you from getting the coverage you need to protect your family or business. When you get a quote from our website you'll be able to see if an exam is required from that insurance carrier. You may not even need an exam!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

How Long Should My Life Insurance Coverage Last?

How long should your life insurance last? This is a common question but not one that is easy to answer. That's because there are a myriad of reasons to buy life insurance. The actual question should be, "How long do I need my policy to last?"

Think of term life insurance as fulfilling a specific need for a specific time. In other words, if you do some math and calculate how much you need (see the previous post) you can also determine how long you need it. If you have a 30-year mortgage, then a 30-year term policy will cover that loan. 

A good example would be a young couple with some small children and a new mortgage. They will need to purchase a policy that will pay out until the house is paid off and the kids are out of the house. Of course, no one knows how long the kids will be around or if you'll be refinancing down the road, but a good estimate is better than nothing.

If you know how long you'll need the policy, then you determine the length of time. You can even "ladder" several policies if you really want to be specific. 

Then there's the inevitable fact that we're all going to die eventually, even if we have done the math and outlived our term policy. That's when permanent life insurance (whole life and universal life) come into play. Unless you are able to prepay for all of your funeral/burial expenses, you may have to purchase "final expense" insurance. 

Like it sounds, permanent insurance will cover you until your death, however, you can pay up premiums early. Many carriers will offer "paid up in 10 or 20 years" or "paid up at 65" options. I recommend the "mix and match" method of purchasing a permanent policy (enough for your funeral and any medical expenses associated with your demise) at the same time you purchase your term life. It's much less expensive in the long run.

If you have questions feel free to contact us.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

Guaranteed Insurability Option Explained

Navigating the world of life insurance can be overwhelming, especially with the variety of "riders" or add-ons available to customize a policy. In a helpful overview by Surf Financial Brokers, Chris explains one of the most valuable yet often misunderstood features: the Guaranteed Insurability Option (GIO). Also known as the Guaranteed Purchase Option, this rider acts as a powerful safety net for policyholders who anticipate their insurance needs may grow in the future.

At its core, the Guaranteed Insurability Option allows you to purchase additional life insurance coverage at specific intervals without having to undergo a new medical exam or provide evidence of insurability. This means that even if your health has declined since you first took out the policy, the insurance company cannot deny you increased coverage. These "option dates" are typically scheduled on the anniversary of the policy or spread out every three to five years.

One important factor to keep in mind is the cost associated with exercising this option. While you don't have to prove you are healthy, the premium for the new, additional coverage will be calculated based on your current age, not your age when you first bought the original policy. For example, if you purchased your base policy at 35 and decide to add coverage ten years later, that specific portion of the premium will reflect your age of 45.

The primary benefit of this rider is the peace of mind it provides for those with changing life circumstances. It is particularly useful for individuals who have taken on more debt or those who have developed health problems that might otherwise make it difficult or impossible to qualify for a new policy. By securing a GIO rider early on, you are essentially "buying availability"—ensuring that the door to more protection remains open regardless of your future medical status. 

From a professional standpoint, agents often recommend this option for specific groups, such as parents insuring small children or individuals with a family history of medical issues. For children, it guarantees they can increase their protection as adults, regardless of what health challenges they may face later in life. For those with existing health concerns, it serves as a critical buffer against the risk of becoming uninsurable in the future.

Ultimately, the Guaranteed Insurability Option is about foresight and flexibility. While the rider itself may add a small cost to your initial premium, the long-term value of being able to scale your coverage to match your life's milestones—like marriage, a new home, or growing a family—is significant. If you are looking to build a robust financial plan, understanding how riders like these work is a vital step in protecting your loved ones. 

If you have questions or comments regarding GIO's, let us know. 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

How Much Disability Insurance Do You Really Need?

Recently I met a woman who had two disability policies. She had bought one on an individual basis years earlier when she was self-employed as a realtor, but now she was working for a plumbing contractor who offered disability insurance. We had a discussion about whether or not she could collect benefits with both insurance companies in the event of a claim.

As a matter of fact, she could collect from both insurance carriers, but with a caveat. You see, the insurers don't want people making more money being disabled than when they were working, so they have a "combined limit" on the total benefit. Generally, insurance companies will allow you to insure between 60% and 80% of your total pre-tax income across all policies combined.

Usually, the group policy has an "offset" clause. This means the group plan might reduce its payout if you receive money from other sources like Social Security. However, a high-quality individual policy is typically "non-cancelable and guaranteed renewable" and usually does not reduce its payout just because you have a group plan.

With all of this in mind, a lot of people will buy just enough coverage to make the mortgage or rent payment. They may have some savings put aside (hopefully for retirement), and are willing to dip into for an emergency. We recommend the M.U.G. (mortgage/utilities/groceries) method of calculating your need. Add those three items together to determine a good amount.

We also offer a worksheet for you if you'd like to calculate how much you need. It's short and can help you plan for the unexpected. 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!