Q. If someone was killed in a car accident, would it matter that he lied about being a smoker on his life insurance application?

The correct answer is:

Yes

 

Yes, the policy would be void and the death benefit could be denied for the deliberate material misrepresentation.

 

How does this affect life insurance premiums?

 

Statistically, smokers are more likely to develop diseases of the respiratory system, which account for about 11% of deaths in Canada every year (source: Statistics Canada: A profile of disability in Canada in 2001). Due of these indicators, smokers will pay a significantly higher premium than non-smokers of the same age group, sometimes as high as 200%.

 

Tip of the week:

 

Besides stating the obvious, that is, "tell the truth on your application", here's a more useful tip. If you successfully quit smoking after obtaining life insurance, you may apply for a reduced rate one year thereafter. Doing this can save thousands of dollars in life insurance premiums!

 

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Learn more about life insurance.

 

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