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JR McDuff

Lurker
Feb 2, 2021
49
82
Greeetings all, I was asked what happens when a pipe smoker passes away with a sizable life insurance policy that was written when they were a non-smoker? Are the beneficiaries penalized by receiving less of the payout? Can the insurance company even find out if the policy holder was a smoker? I wasn't sure how to answer this one. If any of you have ever heard of this happening I would appreciate your thoughts.
Thanks!
 

Zack Miller

Part of the Furniture Now
Dec 13, 2020
643
1,948
Fort Worth, Texas
A few issues. First and foremost, if the insured started smoking after the policy was in effect, there is no penalty.
Generally if an individual lies about any aspect on his initial application for insurance the policy can only be voided during a limited time after it was issued (about two or three years). After that the policy can not be voided.

It would be difficult for the insurance company to find out if the insured was a smoker after he died.
 

anotherbob

Lifer
Mar 30, 2019
15,675
29,392
45
In the semi-rural NorthEastern USA
Greeetings all, I was asked what happens when a pipe smoker passes away with a sizable life insurance policy that was written when they were a non-smoker? Are the beneficiaries penalized by receiving less of the payout? Can the insurance company even find out if the policy holder was a smoker? I wasn't sure how to answer this one. If any of you have ever heard of this happening I would appreciate your thoughts.
Thanks!
I'd ask an expert. Not us. There are always so many in and outs when dealing with vultures.
 

jguss

Lifer
Jul 7, 2013
2,412
6,213
Yes, you absolutely need to consult an expert, and of course carefully read the original policy. But having said that my experience tallies with what Zack said, allowing for potential variation in State law.
 

Zack Miller

Part of the Furniture Now
Dec 13, 2020
643
1,948
Fort Worth, Texas

What if Your Circumstances Change After Buying a Life Insurance Policy?​

Ordinarily, your policy will remain intact even if your circumstances change after buying life insurance. If, for instance, you take up a risky hobby like skydiving or start smoking cigarettes after purchasing the policy, your coverage shouldn't be affected. Why? Because the policy weighs your lifestyle factors at the time coverage is issued and not any subsequent lifestyle changes.
 

kcghost

Lifer
May 6, 2011
13,140
21,409
77
Olathe, Kansas
Insurance companies are kind of strange. Some cases they look into but generally they don't. I expect that if it was for a large amount, they might a little excited.
 
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Ilynelson

Lurker
Jan 31, 2023
3
0
When you apply for life insurance, the insurance company will typically ask you about your health habits, including whether or not you smoke or use tobacco products
 

Ilynelson

Lurker
Jan 31, 2023
3
0
If you disclose that you're a smoker, you may be subject to higher premiums or be denied coverage altogether. If you lie about your smoking status and the insurance company finds out after you pass away, it could impact the payout to your beneficiaries. That being said, it's not always easy for the insurance company to determine if the policyholder was a smoker. I would also recommend checking out Health Coverage for Oregon Small Business for more related info and consultancy.