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Rethinking Tobacco Use In Life Underwriting

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Life insurers began pricing for cigarette smoking in the late 1970s.

In the intervening years, four iterations evolved in the approach to tobacco use in underwriting:

1. Cigarette use only.

2. All tobacco smoking.

3. All tobacco use.

4. All tobacco and nicotine replacement therapy use.

Today, many define “users” as those who 1) admit tobacco consumption, 2) confess to use of nicotine therapy, or 3) deny both and then “get caught” by testing positive for the nicotine by-product cotinine.

Some timely observations are in order regarding prevalent industry practices (or lack thereof) in 2007 in the following areas.

Cotinine: All this test shows is that the applicant did one of three things prior to specimen collection: used tobacco, used a nicotine Rx product, or used “betel.” All the urban legends about cotinine test results are irrelevant. Fact is, industry labs should report cotinine as either “positive” or “negative.” The quantity present is meaningless.

Cigars: Enough already with fantasy cigar use rules! In the upscale market, the cigar-attributable risk pales by comparison with cigarettes.

Smokeless (snuff, chew): There is little to support the argument that smokeless use–in those who do not also smoke–has much risk significance. Some insurance companies already reflect this in their practices.

Betel nut: First off, it isn’t “betel nut.” It is “areca nut,” from a different plant species.

This mild but addicting euphoriant is consumed in a variety of ways (including as a dessert food) in India, Pakistan, Taiwan and elsewhere in Asia. Immigrants bring this culturally-ingrained practice with them.

Areca users can have “false positive” cotinine tests. And, areca nut does cause oral cancer; the risk being akin to, if not worse, than that linked to smokeless tobacco.

Bidis: These are cigarette-equivalents, manufactured in India, sold worldwide and smoked mainly by 12-24 year olds. Misconstrued as “safer than cigarettes” and made appealing by a range of fruit (and other) flavorings, bidis are entrenched in North America but at far lower use rates than cigarettes.

Kreteks (clove cigarettes): Like bidis, they also emanate from Asia, gaining considerable popularity here in California and elsewhere during the 1980s and 1990s. “Cloves” contain tobacco plus other nasty ingredients. They are every bit as lethal as clove-less cigarettes.

Hookah (water pipe, narghile, shisha): Their use is a prevalent, culturally-accepted practice in the Middle East. They have also gained a foothold in North America, both within and outside immigrant populations. These devices are used to smoke tobacco, which is deeply inhaled. It is a myth that passing the tobacco through water is protective of anything.

Do insurers ask applicants about “betel” (areca), bidis, kreteks and hookah smoking?

A poll of 30 major insurers confirms the answer is (uniformly) “no.”

“Pack years” of cigarette smoking: “Current smoking” is far less an issue for insurability than cumulative exposure. Insurers measure the latter as “pack years” (one pack per day for one year constitutes one pack year; two packs per day for 12 months equals two pack years, and so on).

Most insurers do not ask the several questions needed to measure pack years of exposure. Hence, they cannot modify their practices to reflect this overriding consideration; this flirts with the absurd, because persons with 80 pack years of cigarettes can quit for 12 months and qualify as “non-users.”

Further to this point, most high pack year addicts make their “quit” decision for reasons of great underwriting relevance. Life insurers, however, don’t bother asking them why they decided to stop a decades-long habit.

In the age of teleunderwriting (“age” being the operative term now that a 135-company survey has shown that 75% of life insurers do teleunderwriting), the industry can reconfigure its tobacco practices because underwriters get far more credible answers about all aspects of this subject via teleinterviews than they ever did with non-medicals, paramedical and physician exams.

In short, the time to rethink tobacco underwriting is at hand.

Hank George, FALU, CLU, FLMI, is president of Hank George, Inc., Greendale, Wis. His email address is [email protected]