Well, if you lie in an official inurance paper, they could sue you and demand their money back, or worse, deny coverage, when you most need it. Blood or other tests are bound to come, if not officially, then inofficially in some kind of general health examination.
I say, in a casual talk, you can say, what you want, but, when you have to put your signature under a contract, stay honest. If you can't afford the higher rates, stop smoking.