If a smoker who has non-smoker rate life insurance dies of a smoking related illness, do they still pay?

Answer 1

Hi, your friendly insurance guy here again. :)

Hadley has it pretty much right. Insurance contracts come with fine print called the Incontestability Clause. Basically it says the insurance company has X number of years (usually 2) to determine that your application was inaccurate or deceptive, and after that they cannot contest it. That means you could be a heroin user and if the insurance company's testing exams don't detect it and the agent fails to notice you shooting up, if you don't die during the incontestability period they have to pay.

The insurance company will push back if the adjusters or claims departments think you lied, but in most cases the insurance company will lose. After all, it's possible person X was not using heroin when he or she applied, and only picked up the habit years later, in which case the application was filed in good faith.

Some states will allow the insurance company more lattitude in recovery. Mostly, though, if you live through the incontestability period the company must pay.

Note that I do not condone lying in any way.

The questioner, by the way, did not say the insured was a smoker during the application process. For all we know he or she may have applied and become insured at age 20, started smoking at age 35, and then died at age 50. Under those circumstances no deception would have taken place. Let's not be too quick to judge the questioner; after all, we do not have all the data, right?

Best wishes.

Answer 2

I believe the life insurance company will pay out the claim.

You may have taken all the required nicotine tests and physical exams when you originally took out the policy. If the life insurance company performed all the due diligence in determining your non-smoking status when you bought the policy, and then you took up smoking after you had the policy "In Force" - I think they would pay the claim.

A life insurance policy comes with a two year Incontestable Clause. Take a look at your life insurance policy now and review this clause. I believe it states that the insurance company has two years to contest any statements made on the application and contest the policy.

The Incontestable Clause in a life insurance policy states that after the policy is in force two years, the insurance company cannot void it because of misrepresentation or concealment by the insured in obtaining the policy.

However, I do think they may go back and charge the additional premium due for the higher rates for the difference between what you paid in premiums and what you should have paid for a smoker's rate. Maybe they lower the death benefit by the difference in what premiums you paid, and what you should have paid being a smoker.

Either way, I believe they would pay the claim.

I hope that helps. Take care and good luck.

If you have owned your policy for more than two years and you have paid your premiums, I do not think they can deny your claim now, if you were to die.

Answer 3

No. An insurance policy is a legal Document, when the deceased signed the contract, if they were smoking, he lied and the contract is fraudulent. If they started smoking after the contract was signed the insurance company should have been advised, and their coverage/premium adjusted. Very doubtful they would pay out even under that condition. Also, even if it was regular coverage if a person knowing takes out an insurance policy when they know they are possibly terminally ill, the contract is null and void. There are many insurance companies/contracts that state you do not need a Doctor's/Health certificate to apply. READ THE FINE PRINT. No insurance company will insure someone whom is terminally ill. If that was the case everyone who was dying would take out coverage. Everyone that is born dies, and if everyone takes out coverage knowing their dying, that's a lot of bankrupt insurance companies. No matter how good of an insurance company/policy is they are a business. They exist to make money not give it away. If a person with a possible terminal illness has been to a doctor/hospital etc., once diagnosed as such and then proceeds to take out insurance, they are just throwing their money away. Computers remember everything.

Answer 4

If the deceased was a non-smoker at application and then started to smoke, they are covered.

Also, there is a period of contestibility (usually 1 to 3 years). After that time the Insurance company usually cannot deny coverage. They may, however, adjust the benefits to the smokers rates for the premiums paid to date.

Answer 5

Well lets see...you are guilty of FRAUD if you lied on your application in order to save money so either you get on a non-smoking program today or call your company and advise them to change you to smokers rate. Otherwise you take a chance of leaving NOTHING to your family when you croak.

Answer 6

Not if they can prove 'dearly beloved' was a smoker......and they will do everything they can to do so if there is any chance this occurred.

Answer 7

Probably not since that would fall under "Insurance Fraud". e.g. the smoker claiming to be a non-smoker.

Answer 8

I thought fraud denial would only come into place if the misrepresentation would keep the company from writing the coverage.

Heck - - I don't know. Just don't lie.

Answer 9

Probably not if the person said they were a non-smoker. That is called fraud.

Answer 10

no
it will void your contract
they can check your profile
eg: transactions from:
eftpos
credit card
use of any bonus cards - bonus points etc
doctors visits

only if u have always used cash to buy
& never put on record anywhere u smoke