Lying about smoking can be very costly for policyholders.
This is the question that always comes out of an insurer’s mouth: “Are you a smoker? Yes or no?” No one can escape this question when subscribing to an insurance contract. Even less when it is part of the application for a real estate loan which it is compulsory to insure. However, the answer given is not without consequences: between a non-smoker and a smoker, the price of borrower insurance increases on average by 50%, according to information provided by Empruntis to Linternaute.com, i.e. around twenty euros per month.
On a loan taken out for 25 years, this can therefore represent 6,000 euros in additional costs. An expense that is not negligible. Therefore, many smokers are tempted to answer the question in the negative, at the risk of endangering their loved ones, as explained by Pierre de Buhren, general manager of the real estate brokerage company.
Let’s take the example of Pierre and Julie. Both realize their dream of becoming owners. To do this, they took out a loan with a bank and they insured this loan with an insurer. When signing, Pierre lied. He smokes and didn’t say it. As he is young, the insurance did not ask him for medical proof: a simple declaration was enough.
However, over the years, his tobacco consumption caused lung cancer for which he could not be cured. A tragedy that occurred when there were still 15 years of credit remaining to be paid. Therefore, the insurance asked to see the conclusions on the cause of death. She then discovered that Pierre had been smoking for years, with the dramatic consequences that this had, and that he had therefore lied. The beginning of the drama for his partner and their children born in the meantime.
“The day the disaster arrives, the insurance company begins to dig deeper. If the customer has lied, the insurer can claim forfeiture of guarantees or provide only limited compensation,” explains Pierre de Buhren. Concretely, the guarantee signed at the start which allowed the insurance to cover the rest of the credit to be paid in the event of death is not applicable due to the lie.
“Without foresight, there is the risk of suffering the loss of someone and having to leave the premises,” underlines the broker. As the credit payments are not compensated by the insurance, it is up to the partner to assume the burden. However, with only one income, it is impossible to cope. She therefore finds herself obliged to leave the premises and find new accommodation. The double punishment.
This is a hypothetical case. But the spirit of insurance in the event of lying about smoking is indeed this. Less compensation may also be applied. “Lying to avoid €20 per month is weak compared to the protection it provides”, recalls Pierre de Buhren, and adds: “you put money in for X years to build up assets. This money , if one disappears, is lost if one does not have foresight which allows the family to recover the capital.”
Conclusion: “you have to accept being a smoker and look for the contract that best suits your situation.” Especially since the credit insurance can be signed with an organization other than the bank which accepted the loan. Furthermore, for less than €200,000 insured per person or for any loan that is repaid before age 60, the question about smoking is no longer asked.