If you are a smoker and applying for an insurance plan, you might have to pay approximately 40-75 per cent higher premium than a non-smoker.

Due to increased health risks, smokers are statistically more likely to make insurance claims, leading to higher premiums to offset the added risk for the insurance company.

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It is to be noted that a term insurance applicant is categorized as a smoker if he/she has consumed tobacco in any form in the last 12 months.

Smoking causes individuals to be placed in a high-risk category when seeking life insurance, thus increasing their premium compared to a non-smoker.

Also, smokers are more likely to file for a claim on an insurance policy due to premature death or suffering from a critical illness in the later stages of life. This makes them a cost for the insurer.

Higher premiums are charged by the insurers as a way to offset their overall costs incurred during a claim settlement, which, by the way, increases in probability.

A medical test is typically conducted by the life insurer before issuing a Term Life plan. Different tests taken as part of the medical check-up help the insurers determine different health ailments one might currently have or could be exposed to.

Term insurance companies categorise applicants as smokers if a person has smoked or consumed tobacco in the last 36 months. However, it is advised to share your health history with the insurer to avoid hassles later.

Also, if traces of tobacco use are discovered during the underwriting process or through medical tests when applying for a term insurance policy, the insurance company may ask for an additional premium.

However, if a person is a smoker while purchasing a policy and quit smoking during the tenure of the policy, the premium for that policyholder will not come down midway.