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When you apply for most life insurance policies, the application must go through different stages of underwriting before it is approved and the policy is issued.
Underwriting is a very important part of the process of selling life insurance because the underwriters who are assigned the job assess risk and verify that the information provided on the application is honest and accurate.
Any company that fails to thoroughly underwrite an application before the official premiums are set put themselves at risk of being obligated to pay death benefits for someone who is considered a high risk.
Putting the company at-risk will affect the provider’s ability to pay out claims and could also affect its financial strength and credit worthiness.
All of the best companies that sell fully underwritten life insurance plans have a very strict underwriting policy to protect their standing in the marketplace and their ability to profit.
Many different factors are considered in the underwriting process of all life insurance applications. The company has a checklist of different pieces of insurance that must be reviewed and verified in order to assess the mortality of the applicant.
If something disclosed on the application proves to reduce the applicant’s mortality, it is possible that the quoted premium will be inaccurate. The rate may go up, or the issuance of the policy may be denied all together.
One of the many factors that can affect your rates is the results of your life insurance nicotine test and how it matches up with your responses to questions pertaining to nicotine on your application.
Read on, and learn more about this nicotine test and what it entails.
What is the life insurance nicotine test?
Most life insurance companies administer the same type of nicotine test to detect previous use of nicotine when they are accepting an application. The test, which is often called to nicotine/cotinine test, can detect the presence or the absence of cotinine or how much is present in a sample of fluids.
The fluids that are sampled will generally be saliva, but in some cases insurers will test the hair or the urine.
In most cases, insurers will order quantitative testing because this test will help determine the concentration of nicotine in the fluid so that they can determine if there has been use in the recent past.
Some insurers will order a less expensive qualitative test, which simply says if there is any nicotine in the saliva or in urine. Most of the time, urine is only used if someone has stated that they use nicotine replacement products.
How do life insurance companies test for nicotine?
If the company requires you to take an oral nicotine test, you can generally take it at your local agent’s office. Some insurers will send a paramedical service to you for your medical examination and the test will be administered at that time.
When you are using the oral swab, you will be told to rub it around the inside of your cheeks for 30 seconds. You will then put the swab into a vile of serum and it will be tested at a laboratory.
It is not common for insurers to order hair testing, but some will order urine testing at the same time your urine is tested for other illnesses.
If your urine is tested, it will still need to be sent to a lab where the sample will be checked to determine the active nicotine level. The results will be the same across the board no matter what type of fluid is tested because of the way that nicotine is metabolized.
Do nicotine tests look for anything else in the fluid?
It is only natural to be concerned that a medical underwriting test might detect that you use tobacco when you really do not.
It is important that you know that most tests have been specifically set to discriminate when the nicotine levels have come from dietary sources, second-hand smoke or other scenarios.
Some tests do look for more than just the cotinine antigen. These tests may also look for the presence of substances that are smoked like marijuana. You will be asked to sign a form giving your permission to look for the presence of specific substances before it is administered.
Be sure to read what you are signing if you are concerned about what the test is looking for.
How long is nicotine detectable?
Nicotine is not detectable forever, but just because you have not smoked in the past few weeks does not mean that no cotinine will be present in your samples.
How long the test will actually detect tobacco usage will depend on the type of test the underwriting calls for.
Most companies will state that the test can detect the usage of tobacco in the last 12 months if you have been a long-term smoker. While this is what the companies will state, it is very unlikely for a test to show tobacco use if it was more than two to three weeks.
By that time the body will metabolize the toxins and your levels will go back down to those of a non-smoker. It is still important to be honest on your application because you do not know if they will use qualitative or quantitative testing measures.
Why do insurance companies spend money to look for tobacco use?
You may think that it is in the insurer’s best interest to trust what you report on your application rather than spending money to verify that you are a non-smoker.
Unfortunately, if insurers did not check to see if applicants were non-smokers, there would not be anything to stop people applying for insurance from saying they do not smoke. Some information is not verifiable, but smoking is one that can be verified and so it is.
Insurance companies are always researching data and using studies to determine how to set their rates and studies have shown that smoking can reduce life expectancy.
One of the main reasons smoking reduces life expectancy in women and men is because it leads to lung cancer and is responsible for more than 90 percent of the cases of Chronic Obstructive Pulmonary Disease in the nation.
Being that people who smoke are twice as likely to die when they are 65 or older, smokers must pay higher rates.
Shorter term insurance premiums for younger applicants are not likely to be affected as much as the premiums for longer terms that expire past the age of 65 and permanent insurance plans. This is because it is in this age range that the insurer is most likely to lose money.
The insurance company benefits from spending the money to test early on and will recoup that money in the early years of the policy.
How much can smoking affect your life insurance rates?
Different factors will affect your life rates in different rates. In the past, smoking did not affect life insurance at all because no studies were done on the affects of nicotine use.
Now that everyone knows how harmful tobacco can be, it really can raise your rates when you are rated as a tobacco user. This is because, even if you are in the high end of the mortality table, the number of years that you will live statistically will go down.
How much tobacco use will affect your rates will depend on your age, your gender, and also other health conditions that could further impact your rates.
When you state that you do smoke on your insurance application, you will be rated as a tobacco user instead of being rated preferred, super preferred or standard.
There are different classes within the tobacco rating class itself. If you are in excellent health and you do smoke regularly, you will be a preferred tobacco class. If your health is okay or you might have a higher Body Mass Index, you will be standard tobacco.
People who have medical conditions and who smoke may be denied coverage or could be table rated. Table rated applicants are those who pay a fixed amount per thousand dollars in coverage because they do not fall into a specific classification entirely.
It is like getting custom rates or a custom rating classification, but the rates will be higher than the standard rates and your quotes may not be accurate.
If you have smoked in the past, you need to determine how long you have to quit before the company considers you a non-smoker.
Once you have done your homework it will be time to compare rates. You can do this by calling agents, going to local offices, or by using an advanced rate comparison tool online, such as the FREE one below!
This comparison tools allow you to price the cost of insurance for a non-smoker and compare the costs to the premiums for tobacco users. You can then determine which company offers the best rates for your rating class.