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Will electronic smoking benefits be reflected in your life insurance premiums?
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Mark Benson Offline
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Thumbs Up Will electronic smoking benefits be reflected in your life insurance premiums?
While there is growing evidence that electronic cigarettes are at worst "less harmful" than their tobacco cigarette counterparts, there is also growing evidence that life insurance companies are not prepared to acknowledge this yet. A report in a Canadian life insurance market publication has confirmed the concerns of many that life insurance premiums for tobacco cigarette smokers and electronic cigarette users will be very closely entwined for some time to come.
 
Indeed a prominent Canadian insurance company was quoted as suggesting that there will be no difference in life-insurance premiums for those using electronic cigarettes compared to those using tobacco cigarettes. There were a number of concerns raised by the insurance company which we will cover below.
 
Why your life-insurance premiums remain unchanged
 
In what many believe is a reflection of the growing political angle on electronic cigarettes, that they are a potential gateway back to tobacco cigarettes, this is one of the core planks of the insurance companies stance. Insurance companies argue that there is a high risk of returning to tobacco cigarettes after using electronic cigarettes despite the fact there is evidence to the contrary. The vast majority of those who switch from tobacco to electronic cigarettes have not been tempted to return although many politicians refuse to recognise this.
 
The insurance companies also suggest that by replicating the experience of tobacco cigarettes with a similar shape, similar size and similar weight, electronic cigarettes offer a greater risk of a return to tobacco. Indeed, one of the other reasons offered by the Canadian insurance industry relates to electronic cigarette refills and the fact that it is difficult to know for sure whether someone is using non-nicotine, low nicotine or some other kind of substance. While this seems something of a bizarre argument it is something which the insurance companies are using to protect their market income.
 
Regulatory void
 
The simple fact is that there is a major regulatory and advisory void left by the Food and Drug Administration (FDA) which has played into the hands of the insurance companies. No government around the world is willing at this moment in time to give definitive advice regarding electronic cigarettes therefore leaving the opportunity for commercial parties to treat them the same as tobacco cigarettes. Whether or not this will change as and when the FDA finally announces its recommendations for the future regulation of the electronic cigarette market remains to be seen.
 
Politicians around the world have been talking down the electronic cigarette industry for some time now, they have been attempting to muddy the water and to a certain extent you could argue they have been successful. There are still many grey areas when looking at tobacco cigarettes and electronic cigarettes and life insurance is just one of these. It will be interesting to see how the life-insurance companies react as and when further official advice is offered by governments around the world and indeed whether they will reconsider their current stance.
 
Conclusion
 
While many electronic cigarette users have reported an improvement in their health after switching from tobacco cigarettes, those waiting for this to be reflected in their life-insurance premiums could be waiting some time. At worst there is evidence that electronic cigarettes are "less harmful" than their tobacco cigarette counterparts but this does not seem to be enough for life-insurance companies to even consider a reduction in the risk premium afforded to electronic cigarette users. Some sceptics believe that life-insurance companies will always treat electronic cigarettes the same as their tobacco counterparts although, as more evidence emerges of the very different impact upon an individual's health, surely at some point they will change this stance?

For more information on OK Electronic Cigarettes and the various products available please visit the OKCigs website.
01-04-2014 03:42 PM
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