Helping clients understand that smoking may impact their coverage

By Elli Schochet, CFP

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 policy 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 really inform them that nondisclosure will void a contract and they really need to be 100 percent totally honest with it. Otherwise, don’t bother buying the policy.

Schochet is a 19-year MDRT member from Toronto, Ontario, Canada. Hear more in the August episode of the MDRT Podcast.

 

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