Are smokers eligible for term insurance?

Name withheld on request

Applicants for term insurance are considered smokers if they have used tobacco in any way in the last 12 months. It is important to note that the premium for a smoker will be higher than that for a non-smoker due to the increased health risks associated with smoking. The exact amount of premium increase will depend on various factors such as age, health condition, smoking habits and the sum assured of the policy.

As a smoker, it is important that you truthfully disclose your smoking habit at the time of application to ensure that your policy remains valid, and that any future claims made for non-disclosure is not rejected on that ground. If the medical reports are satisfactory, the insurance company may offer a term plan.

The increase in premium can be 40-50% or more depending on the insurer and the smoking habits of the individual.

I am 35 years old and the only earning member of my family consisting of my wife and two daughters. I earn 20 lakh per annum and have recently bought a house 1.5 crores. I took a home loan for this 1.1 crore. At that time, my bank relationship manager persuaded me to buy a term plan for the sum assured 1 crore. Should I choose another term plan for additional protection?

Name withheld on request

Term plans are a great way to secure the financial future of your family. It is good that you have already bought a term plan. However, considering the size of your home loan and the responsibility of supporting your family, it may be worth considering an additional term plan. While deciding the Sum Assured for a new term plan, consider factors such as the current and future financial needs of your family, any outstanding loans, and the impact of inflation on their expenses.

Ultimately, the decision to buy an additional term plan should be based on your individual financial goals and circumstances.

Kamlesh Rao is the MD and CEO of Aditya Birla Sun Life Insurance.