Life insurance customers in India pay 56 percent more if they smoke

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Non-smokers in the country pay less than half than their counterparts do within that country.

The research from Aviva Life Insurance in India has revealed that when a 10 year term plan is purchased by a smoker in India, he or she pays 56 percent more than his or her nonsmoking counterparts.

This is because the habit has been identified as increasing a large number of health risks among policyholders.

Term plans are the form where only the life insurance amount is paid at the time of a policyholder’s death when it has occurred ahead of the term of that policy. As the risk of death during a span of time is higher for smokers than it is for nonsmokers, insurers are mitigating their own risks by pricing the policies for smokers at a much higher rate.

life Insurance for SmokersSmokers therefore have life insurance costs as another point to add to their list of reasons to quit.

The research was based on the premiums that were calculated using online term plans offered by Aviva Life Insurance company. Its data was calculated based on an inflation rate of 30 percent. These statistics affect a considerable number of people within India.

According to estimates, there are 275 million people who consume tobacco products in India. Furthermore, the life insurance company reported that from 2011 to 2012, there was a year over year increase in the domestic consumption of cigarettes of 4.19 percent. This shows that the trend is only growing for the number of potential customers who will be covered with higher risks, therefore leading insurers to charge them more to compensate for the higher risk of the covered pool as a whole.

Though nonsmokers have an incentive with lower premiums on their life insurance policies, non-life insurers, which means that the actual motivation to quit smoking for the population of India is much lower in terms of coverage expense. The primary difference is that there are individuals who do disclose that they smoke when they are purchasing a health policy and, in those cases, they will typically need to undergo more stringent medical testing than nonsmokers.

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