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Up in smoke

Matt Pais

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Explaining to clients how even a few cigarettes can increase premiums.

Do clients understand how smoking may impact their insurance coverage? How can you approach these conversations? In a recent episode of the MDRT Podcast, MDRT members discussed how they educate their clients and how their discussions can inspire clients to change their behavior.

Elli Schochet, CFP, a 19-year MDRT member from Toronto, Ontario, Canada: People think if they have one or two cigarettes, they’re casual smokers — they’re not really a smoker. We recently had a situation with a young fellow who was looking to replace some term insurance.

We don’t do the medical questions but we do ask whether clients have had any cigarettes in the past 12 months. And he said, “Yes I have. I’ve had maybe five or 10 cigarettes a year.” We told him he is considered a smoker, which blew him away. He couldn’t fathom why a casual smoker has the same risk as a more frequent smoker.

It caused him to not proceed with the policy — a good decision on his part because lying would just cause the policy to be ineffective. He even went so far as to say, “Well, why don’t I just go to another advisor and not tell them, because you should have told me that saying I smoke a few cigarettes makes me a smoker.”

The reality is that our job is not to just sell a policy but to advise the clients that they need full and proper disclosure, otherwise the policies won’t pay out. The one scenario that probably comes up the most often is the illusion people have that casual smoking doesn’t classify them as a smoker. It’s our job to inform them that nondisclosure will void a contract and they need to be 100 percent honest with it. Otherwise, don’t bother buying the policy.

Michael Bibb, BA, Dip PFS, a five-year MDRT member from Warwick, England: I think some of it has to do with shame. If someone is, for example, a casual smoker, it’s something they know they have a choice in, but it’s actually beating them. I think people are a lot more health conscious, so there might be that degree of embarrassment about it. For us, if you smoke, it doesn’t matter how many you have. You’re a smoker.

We encourage clients to look at that lifestyle. We want them to be around in the next 10 or 20 Christmases. A part of what we do is a lifestyle piece. If they are smoking now and the premiums are really high, how important are those, for example, five cigarettes a year? If we stop that, let’s revisit it in a year, let’s get a competitive price and let’s focus on health.

Sunny Jae Lee, IAR, an eight-year MDRT member from Los Angeles, California: Right now I have three clients who are waiting one to three more months. They’re casual smokers, but I told them that casual smoking doesn’t matter — they are smokers. They’re not going to get a really preferred rating. So we talked to the underwriters, who gave each one of them a timeline where if they can be completely smoke-free, then on the record they can actually identify themselves as a non-smoker. So there are some cases that are put on hold because of that.

Schochet: You’re right, you’re either pregnant or you’re not pregnant, and that’s how we look at smoking status. We tell our clients that. If they are smokers, we’ll encourage them to take the policy as a smoker so they have their protection. And in 12 months’ time, if they are healthy, then they can apply to have non-smoker rates applied to their policy.

Shelley MacIntyre, CHS, a four-year MDRT member from Belleville, Ontario, Canada: I’ve gotten more than one client to stop smoking. They see the difference in the pricing. I’m all about encouraging healthy living, and it’s amazing how far “I’m so proud of you” goes, even with an adult. They’re trying so hard, and their premiums are going to cut in half.

There is nothing more satisfying than when you get to approach the underwriters after a year smoke-free and say, “Can you lower the premium?” And they get lowered. And they’re so excited about it.

It’s not because the underwriters don’t like smokers vs. nonsmokers; it’s because you’re at that much higher of a risk of dying prematurely. When clients hear that, it makes a huge difference.


Michael Bibb at

Sunny Lee at

Shelley MacIntyre at

Elli Schochet at


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