Life insurance can be an expensive undertaking, but as most know, it’s even more expensive for those with high-risk habits such as smoking or chewing tobacco, as well as the use of nicotine patches—yes, the patch counts!
Different life insurance agencies have different standards for what they will insure and for what price they will insure a smoker at, so the below questions and answers should be viewed only as a general guideline. To obtain the most accurate information, be sure to quiz your potential insurer, or consult with an insurance specialist.
As always, honesty is always the best policy when handling life insurance quotes.
Q: What happens if I lie on my life insurance application about being a smoker?
A: You will be guilty of committing insurance fraud, though you won’t be thrown in jail for such an offense. You will, however, have your application cancelled and if this particular agency was offering the best rates, you’re out of luck.
If you’re not caught until later, say if you die of a smoking-related illness, your policy can be rescinded, with no pay out. This will usually be the case if you’re still within the contestation period; however, in some cases, death benefits will still be paid in the form of a refund on premiums paid, minus the amount that the policy holder should have been paying as a smoker.
Q: What classifies me as a smoker?
A: Usually, this is determined from your use of tobacco products over the previous 12-month period. If you’ve used cigars, chewing tobacco, cigarettes, or have worn a nicotine patch, you’re considered a smoker. For some agencies, this will stand even if you only have the occasional cigar.
Q: I’m trying to quit smoking; can I change over to a non-smoker policy later?
A: Yes! You can be reclassified as a non-smoker down the road, once you’ve been tobacco-free (patches too!) for a consecutive 12-month period (some agencies require longer, so be sure to ask).
Q: If I start smoking again down the road, how is my policy affected?
A: This depends upon the agency you have a policy with and what their regulations dictate. In most cases, if you are tobacco-free for the 12-months prior to applying, during the application process, and for the two-year contestation period after acceptance, you won’t face any consequences, if everything is properly documented. Some agencies, however, do have a contingency for such an instance and will put into the fine print of their policy a clause dictating that you must contact them and switch to a smoker policy.
Have you ever been to a yard sale? They used to be quite popular 15 or so years ago, but since the Internet has stormed our households, suddenly yard sales aren’t as useful. After all, instead of spending 30 minutes making ourselves look presentable enough to go outside and peruse that sale, we could be sitting in front of our computer and finding a great deal with our pajamas on. While you can find some deals online, I still believe in the art of finding deals at your local yard sale.
Let’s think about our online purchases for a moment. I’d say that five years ago or so, it was pretty easy to scroll through Craigslist or Kijiji and find a screaming deal on something we were looking for. It was great! We called up the buyer, made sure they still had the item, and then we hopped into our car with our cash to go pick it up. Simple huh? But what’s it like today? With so many people online, here’s how the scenario typically plays out: You are looking for a new smart phone to replace your old one that recently took a dive in the toilet, and low and behold, there it is! It’s an iPhone 4S (it has Siri even!) and it’s only listed for $50. It was posted just a couple of hours ago, so you might still have a chance to pick up this sweet deal. Quickly, you dial the number on the ad and nobody answers. In fact, not only does no one answer, but their voice mail is full. There has already been so much interest in this phone that the seller has stopped answering her phone and her voice mail is full! You never had a chance.
With all of our interest flowing from the yard sales to the online sales, it is now much more difficult to find a deal with your computer. But, do you know where you can find the deals now? You’ve got it: the yard sales.
Fewer and fewer people stop at those yard sales, but the sellers still want to get rid of all their stuff! As the day goes on, prices start going down and down. The only difficulty is knowing what’s actually for sale in the yard. Well, the only way to truly know is to get down and dirty and take a close look at everything.
Typically, yard sales have exercise equipment, furniture, sports equipment, books, kid’s toys, and gently used kid’s clothing. Since the interest in these items is low, you can really find some sweet deals here. Furniture is often priced at less than 10% compared to store prices, and the same is true for that exercise equipment! If you’re looking to get back in shape, don’t head to the retail store. Take a trip to some yard sales! You’ll find some great stuff, and it will be priced so low that it might still be worth buying, even if you only work out for 2 weeks.
Not only is it fun to pick through these yard sales, but it can also be very profitable. Yes, you might find some great deals, but occasionally, you might also find some very rare antiques. If you have an eye for expensive, rare items, you could very well be one of the next surprised faces at the Antique Roadshow with your $25,000 vase. Who knows! There are surprises at every yard sale. Stop by and score a deal sometime soon.
Let’s start with a stock market analogy. I promise, it’ll be more entertaining than you think.
I am a somewhat odd investor. While most investors focus on big and well established companies, I tend to look at small companies that don’t even show up on anybody’s radar. There are a few reasons why I invest this way, but we’re only going to focus on one. Small companies have the potential to beat the returns of the S&P 500 or the TSX handily. They also have the potential to blow up, but they don’t do it as often as you’d think. Especially when you focus on buying assets for 50 cents on the dollar.
That wasn’t so bad, now was it? I think that I can get better results than most mutual fund managers if I do the investing equivalent of looking in closets and under rugs for stocks that I think represent good value. You are probably shaking your head like I am an insane person. You’re probably set to go buy some index funds right now, mostly just to spite me. And hey, you probably should. My method of investing is probably wrong for you.
Now let’s move the metaphor over to stuff you buy. If you’re a burger connoisseur, you’ve probably stopped in at a Five Guys at least once. Those burgers are like a little bit of heaven in your mouth. If I lived near a Five Guys, I would weigh 400 pounds. And yet, if you’re a vegetarian, you’d likely get no value at all out of one of their burgers. In fact, it would probably make you a little sick to your stomach.
What’s the point? Being frugal is all about getting the best bang for your buck, right? Being frugal is about spending more on something that’s higher quality because it’ll last longer. Being frugal is spending money on stuff that’s important to you, and eschewing the rest. All these things are true. There’s just one thing.
Not everybody values the same thing. Therefore, your idea of frugality is right, but only for you.
Say SPF and I go into the same store, and look at the same pair of shoes. Simon likes that the shoes are made in Canada, with recycled tires mixed into the rubber in the soles, and the manufacturer will plant a tree if you buy a pair of shoes. He picks up the shoes, even though they cost $199.
I look at the same pair of shoes, look at the features and then the price, utter a couple of swear words under my breath, and then go and find the nearest pair of New Balance sneakers. I love the environment and all (nose grows two sizes bigger), but I’m not paying that high of a premium for shoes.
I look at shoes as something that keeps my feet from getting wet. SPF looks at shoes as something that he can use to make a positive thing happen. Who’s right? We both are.
You’ve heard the adage that you get what you pay for? I’m sure you have, since people have been using it without thought for years.
Let’s keep going with the shoe analogy, because hey, at least half the people reading this really like shoes. I once went to Sport Chek and bought new sneakers. On my way out of the mall, I stopped at Winners, a popular discount chain in Canada. As I was browsing that store, I came across virtually the same pair of shoes. I used my phone to Google the shoes, to discover they were last year’s model. The only difference between the shoes were a slightly different design.
I picked up these shoes for half the price of the original ones, and then went and returned the old ones. I saved $60.
The underlying impression of the you get what you pay for statement is that value doesn’t exist. Everything is always priced fairly and efficiently. Anyone who has ever spent longer than two hours in a store knows value is everywhere around them, it’s just up to you to find it.
But here’s the kicker. Value will always be different for everyone, since different people value different things. I gladly took last year’s model of shoes to save $60. Would a hip-cool fashionista woman do the same thing? Maybe not. When presented with a Five Guys’ and a McDonald’s burger side by side, I would gladly pay a premium for the offering from Five Guys. The girl I know who doesn’t like hamburgers would probably run away from both in search for chicken nuggets.
When you think you’re being frugal and smart by spending extra for higher quality, but maybe you aren’t. Have you really exhausted all alternatives in a search for value? Have you even figured out why you place value on something in the first place? Hey, maybe you think you need the fancy pair of shoes because marketing has convinced you some extra feature will make your feet better in every way.
The next time you buy something, maybe keep this stuff in mind. And maybe you’ll figure out that the cheap pair of shoes isn’t so bad, and you’ll save yourself some cash. Sometimes we just spend more because we’ve been told higher priced items are therefore better quality. Become a smarter consumer. You’ll save some money.
I am not a frugal person. Even when I had to pinch pennies while my husband and I were in grad school, I hated being frugal. Now that I don’t have to worry as much about being frugal, I…don’t worry about being frugal.
And the world hasn’t ended.
While there’s nothing wrong with being frugal if that’s your preference, I don’t think the world will end if you aren’t frugal.
Getting the Best Value
This doesn’t mean that I just spend on whatever I please, without paying attention to value. My husband and I are big on getting the best bang for our buck. We want to make sure that we are getting the most for our money, whether my husband is scouring eBay for a good deal on dress shirts (the mid-range brands, not the cheap brands), or whether I’ve signed up for a loyalty program with our favorite hotel chain.
Value is about more than just cost, too. When I say I want the best value for my money, I don’t mean that I’m going to stay at the cheapest hotel, or buy the least expensive shoes during a BOGO sale. For me value also includes the following considerations:
- Time: My time is a big thing. I value my time as much — or more — than I value money. If paying a little more saves me time, then I’ll happily do it. Sometimes that means just buying a convenience item while I’m the grocery store so that I don’t have to spend another hour driving to another store, parking, and finding the item — just to save $2 or $3. I want that hour to play catch with my son, or to go to lunch with my husband.
- Convenience: I don’t like catching red-eyes. Usually, it means that I can’t take my son into school before I leave on a trip, or it means that I’m exhausted when I arrive. I’d much rather pay for a more convenient flight. It’s why our organic milk and produce items are delivered to our door, and it’s why we pay the “convenience” fee to buy event and movie tickets online.
- Experience: I know exactly what I need to do in order to engage in frugal travel. I do very little of it. I want a fun, worry-free experience. So, I’m willing to pay. I also like the experience of having someone else do my nails, so I don’t give myself manis or pedis. A good experience is part of good value for me, whether it’s at the restaurant, the campground, or somewhere else.
Of course, not everyone thinks it’s worth it to pay for the same things I do. And that’s fine. You need to decide what works for you, and what constitutes the best value for what you spend. For many people, the best value is expressed mainly in terms of money. The lower the cost, the better the value. And that’s fine.
But if you aren’t the frugal sort, you can take heart, too. Value doesn’t always have to be about price.
What do you think? Are you frugal?