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Life Insurance Havens

Life Insurance Havens Cigar smokers can still get affordable coverage—even when they own up to their passion
Michael Moretti
From the Print Edition:
Michael Jordan, July/August 2005

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The reason, Compain-Romero says, stems from the cigar boom of the mid to late 1990s. "There was an upsurge, and it became very hip and popular to smoke stogies like your grandfather or father did, and our underwriters were faced with looking at that and defining some terms," she says.

Carbon notes that there are no real specifics to point to regarding Northwestern's decision to make its policy more restrictive. "We decided that there were some additional risks in the use of tobacco products, whether it be chew or pipes or cigars," he says. Carbon does not cite one particular study as the cause, but attributes the accumulation of different studies over the past few years reporting increased risk that led to the policy change.

For years before blood and urine tests became routine, many people would play the odds, said Udell, falsely reporting themselves as nonsmokers. If the insurance company ever found out, they or their surviving relatives would have to make up the difference between what was not paid on the smoker's insurance. Once companies caught on, they started screening for nicotine; many smokers promptly said they were cigar smokers to account for the nicotine in their systems, and were thereby excused from cigarette smoker rates. Finally, catching on to this, insurance companies amended their plans and grouped all smokers into one big, fuming heap.

Companies now use cotinine screening to determine evidence of tobacco use. According to the Centers for Disease Control and Prevention, "cotinine, a major metabolite of nicotine, is currently regarded as the best biomarker in active smokers and in nonsmokers. Cotinine persists longer in the body than nicotine and can be measured in serum, urine, saliva and hair."

At State Farm, any trace of nicotine in the body may land life insurance applicants—regardless of smoking frequency—in the smoker category. Such evidence, combined with verbal data, is enough to classify an applicant as a smoker or a nonsmoker, Compain-Romero says.

Northwestern, Carbon says, will still consider an applicant a nonsmoker as long as tests don't indicate more than 0.5 micrograms of tobacco. He says this allows for secondhand smoke and naturally-occurring nicotine in the environment.

Carbon says there are two big problems when it comes to the issue of tobacco use. "There are no really good studies in clinical medicine about when the negative effects of tobacco really begin...and no good way to measure the amount of tobacco an individual uses," he says. The cotinine tests are an improvement over past screening methods, but can sometimes yield questionable results.

"A person who is a light smoker could test after a day of not smoking as lightly as a person who just had their one cigar per year," says Carbon. He says if a person smokes one cigar the day before an exam, he will test positive and most likely be grouped with smokers regardless of his yearly usage.

Still, despite all the testing and policy making, there is a loophole in most policies that doesn't discriminate between cigarettes and cigars, which is referred to as a two-year "incontestable clause." This means that a company can challenge and deny a claim within two years from the date the policy was initiated. For instance, if an applicant were to lie about cigarette smoking, then die of lung cancer within two years of having initiated the life insurance policy, the insurance company could nullify the claim or demand that the difference in premiums be paid. After two years, however, the company would have to pay the claim.

"After ten years or so, linking your death to smoking is less important to the [insurance companies] than not reneging on a death claim," according to a report from

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