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From: spaf@gatech.CSNET (Gene Spafford)
Newsgroups: net.med
Subject: Smoking and Insurance
Message-ID: <2080@gatech.CSNET>
Date: Thu, 28-Nov-85 16:26:27 EST
Article-I.D.: gatech.2080
Posted: Thu Nov 28 16:26:27 1985
Date-Received: Fri, 29-Nov-85 08:31:19 EST
Organization: The Clouds Project, School of ICS, Georgia Tech
Lines: 40
Summary: you bet your life smoking is hazardous

Here's some interesting information about smoking and risks. At least,
I think it is pretty interesting.

First, some background info:  My wife works full-time as a
representative for a financial services company.  One of the primary
products of the company is term life insurance (they do not market any
other kind of life insurance -- whole life and universal life policies
are almost always a waste of (some or most of) the customers' money).
Anyhow, her company is currently the world's largest marketer of life
insurance (all forms combined) -- they will sell more this year than #2
and #3 combined (#2 is Prudential, and #3 is New York Life; her company
is A. L. Williams).

Now the interesting fact: Kathy's company recently reduced the rates on
the policies they sell -- for NON-smokers.  Someone who smokes can
continue to get insurance at the old rates.  However, a non-smoker
(anyone who has not smoked in the last 12 months) can buy almost a
third again more coverage in a policy for the same amount of premium
(Kathy figured this on a 35 year old male buying $50K insurance on a 15
year level term policy, your actual mileage may vary).

The insurance company is surely not going to do something to lose
money.  With almost $60 billion worth of policies issued (that's only
for A.L. Williams, and only this year to date), it would be a grave
mistake to do something like this unless there was economic sense to
it.  The tobacco companies may claim that there is no scientific proof
that smoking is harmful to health, but the insurance actuaries are
willing to wager cold, hard cash that if you smoke, your beneficiaries
are more likely to collect on your life insurance in the next 15
years.

Besides the obvious bias in favor of non-smokers, I think the most
interesting part of this is that they make no distinction between
someone who has never smoked, and someone who has quit for at least a
year.  
-- 
Gene "wedding done, thesis to go" Spafford
The Clouds Project, School of ICS, Georgia Tech, Atlanta GA 30332
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