UPDATE: E-Cigarette Users and Life Insurance

Posted on March 31, 2014 in Life Insurance Canada News
e cig vaporizer life insurance
E-cigarette users are considered smokers by insurance companies.
 

According to Health Canada and Statistics Canada, there are 4.9 million smokers in Canada (approximately 17.3%), and now that smoking has become harder to do in public, with laws in many provinces against smoking in office buildings, restaurants, patios, and generally anywhere indoors, many smokers are turning to e-cigarettes.

E-cigarettes straddle a line of legality: they can be sold if they release vapour and not nicotine, but they can't be advertised as a healthy alternative to cigarettes. Even though all e-cigarettes come with vapour filters, they can be exchanged for nicotine filters, which are sold separately. Since these cigarettes expel water vapour instead of smoke, they can be smoked indoors, and many assume that they are healthier than conventional cigarettes because they do not include any of the byproduct chemicals regular cigarettes are made with.

However, given their rather ambiguous legal standing and the Canadian Lung Association's urging for tighter restrictions against e-cigarettes, Health Canada is spending $320,000 to track how many e-cigarettes were sold over the last two years, including monthly totals.

For their part, the government does not approve of electronic cigarettes.

“To date there is not sufficient evidence that the potential benefits of e-cigarettes in helping Canadians to quit smoking outweigh the potential risks,” said a statement from Health Canada.

A new study even raises new doubts about e-cigarettes potential to help people quit smoking. According to The Washington Post, "Researchers writing in JAMA Internal Medicine found that use of e-cigarettes was not associated with “greater rates of quitting cigarettes or reduced cigarette consumption” after one year. The authors reached the conclusion based on self-reported data from 949 smokers, which included 88 who used e-cigarettes."

While the scientists behind it admit that the sample size may have been too small to really establish a connection between e-cigarettes and quitting smoking, they do say that it adds to the mounting evidence that e-cigarettes do not necessarily lead to a drop in smoking rates.

A media relations spokesperson for Health Canada even went as far as telling the Insurance and Investment Journal that e-cigarettes are against the law.

“E-cigarette products, including e-liquids, that contain any amount of nicotine or have a health claim fall within the scope of the Food and Drugs Act and require approval by Health Canada before they can be imported, advertised or sold in Canada,” said media relations officer Gary Scott Holub.

“This means that currently, the importation, advertisement and sale of electronic cigarette products, including e-liquid, that contain nicotine and/or have health claims is non-compliant with the Food and Drugs Act, and is therefore illegal. Health Canada urges any Canadian who is trying to quit smoking to talk with their doctor and see what products are available to help them.”

But the office of Canadian Health Minister Rona Ambrose insists that the money the government is spending to track e-cigarette sales is not being used to craft new legislation.

“I don’t have any further info for you at this point,” spokesman Michael Bolkenius told The Chronicle-Herald in response to that question in mid-March 2014.

He did say that vendors of e-cigarettes are currently being sent letters that will make sure that they are in step with the law.

So what does all this mean for your ability to qualify for life insurance if you are a smoke of e-cigarettes? Well, we're sorry to tell you that as much as some people use them as a way to wean themselves off of cigarettes like a nicotine patch or gum, since their health benefits are so far dubious at best, you will still be classified as a smoker by insurance companies.

This means that you will still be paying smoker rates. Why? A spokesperson for The Desjardins Group told The Insurance and Investment Journal the reason:

“The individual could still be considered a smoker as there generally is a higher risk factor that the individual could return to smoking, because it’s a similar activity that replicates smoking. Also some e-cigarettes can include a reduced amount of nicotine. Since there is no way to be sure if the individual is always using a non-nicotine e-cigarette, they would be considered a smoker, due to the possibility of nicotine-content e-cigarettes.”

As a result, smokers of e-cigarettes will pay a higher monthly insurance premium than the rest of us, but they will pay the same amount as smokers of traditional cigarettes already do.

Prices for smokers against those of non-smokers may look like this:

  • $500K in Term 20 coverage for a 45-year-old, male non-smoker can cost $86.90 a month, but for the same person who is a smoker, they would pay $231.80 a month.
  • $500K in Term 100 coverage for a 45-year-old, male non-smoker costs $465.55 a month, but for the same person as a smoker. it would cost $711.90 a month.

For more information about what e-cigarettes mean to insurance companies, please call 1-866-899-4849.

This article is getting discussed quite a bit on Twitter. See below to check out what people are saying:

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3 Comments

  1. LSM Insurance 04/22/2014 at 3:03 pm

    LSM Insurance appeared in today’s National Post. Chantal’s take on E Cigarette use and Life Insurance can be found here link to news.nationalpost.com

  2. Ami Maishlish 04/25/2014 at 1:53 am

    The issue with e-cigarettes is that the “jury is still deliberating” on the health hazards involved. One of the challenges is that there are so many brands from so many sources, most unregulated and thus unmonitored. It is therefor just as reasonable to assume that e-cigarettes are less harmful than “traditional” cancer sticks as it is to assume that e-cigarettes may be even more of a health hazard than the “traditionals”.

    In fact, some e-cigarettes have been found to deliver more carcinogens and more nicotine than traditional cancer sticks.

    Therefore, it is prudent for insurers to view use of e-cigarettes in the same manner as other forms of direct nicotine consumption so long as nicotine is being delivered by these contraptions. Applicants for life insurance should take great care to disclose any and all use of e-cigarettes accurately and even if such use is rare or infrequent.

    Fibbing or incompletely answering the questions on a life insurance application may get you approved to pay premiums but potentially not for any coverage

  3. LSM Insurance 04/25/2014 at 5:20 am

    Thanks Ami. By all means the application questions have to be answered correctly.

    The problem I have with it is that IMO an E-Cigarette user not using Nicotine for a year should not be priced as a smoker.

    If the insurers feel nicotine free E-Cigarettes have health risks than give a rated policy to the insured (for non insurance people this an added risk charge for an extra risk) but don’t price them as smokers.

    They are not properly categorizing the risk.

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