I met with a new client in the Carrollton area two weeks ago to complete setting up her car insurance. Once that was done, she wanted to discuss life insurance. She has a term policy which is beyond the 10 year term it was written under resulting in annual rate increases. She wanted to know what her options are.
I asked her the preliminary questions I need answered in order to prepare a quote for her including height, weight, medications, family medical history, and whether or not she smoked. She doesn’t smoke, but she does use a vapor pen, or vape, which contains nicotine, so would she be written with a nicotine or non-nicotine rate? Since this was the first time I’d been asked this, I told her I’d talk with the underwriter and find out.
Historically, most life insurance companies classify people into two broad categories, smoker or non-smoker, and rate them accordingly. People who smoke pay a higher rate than non-smokers due to the health risks of smoking. Several life companies, changed these categories to rate for nicotine use rather than smoking. These companies renamed the two broad categories nicotine or non-nicotine to rate for people who don’t smoke, but do use smokeless tobacco (dip or chew).
There are a few companies, however, that provide a non-smoker rate to people who dip, smoke cigars (don’t inhale!), and use e-cigarettes or vapor pens. I’ve even run into a company that will provide a non-smoker rate for a person who smokes no more than 2 regular cigarettes a week. Their reasoning is a person who limits their smoking to this amount while consuming an adult beverage, is different than the person who smokes daily (the level of nicotine in the blood tests reveals whether or not the person is telling the truth).
The answer to my client’s question as to whether she qualifies as a non-smoker, even though she uses a vape daily is, it depends on the life insurance company. Some will rate her as a smoker or nicotine user and will place her at the higher rate. Others, however, are willing to write her as a non-smoker, which is why we’ll submit an application to one of those companies next week.
We both learned something new as a result of her question. I appreciated her honesty because it enabled me to find an option that fits her needs rather than going through the process of focusing on one that doesn’t. This level of partnership between client and agent paves the way to a relationship of trust where I’m able to be her insurance advisor and not just her insurance agent. What do you think? Share your comments, questions, or experiences with me on our Google +, Facebook, or LinkedIn pages. I’d love to hear from you!