Six planes down: The magnitude of nicotine’s impact on mortality

Jenna Fariss, ASA, MAAA

Director and Actuary

September 24, 2024

The life insurance industry has long held that tobacco-using applicants have 200% mortality across the board. But that rule profoundly understates the risk, because smokers’ comorbidities are far deadlier, and their elevated mortality is surprisingly durable, even if they successfully quit.

Meanwhile, legacy methods of identifying smokers (e.g., APSs) are less practical as simplified-issue products are more common, fully underwritten policies are often accelerated, and customers demand fast and fluidless purchasing experiences. Now that data-driven tools are available and more widely adopted, carriers can instantly and reliably find fact-based evidence of nicotine use in applicants—but they may need to think differently in applying that insight in their underwriting processes.

Jenna Fariss’s article in ON THE RISK surveys the latest smoking risk data and explains why tools that highlight nicotine use may be the single most effective way to limit slippage and enhance profitability.

This article was originally featured in the September 2024 Issue of OTR and is reprinted with permission of ON THE RISK, Journal of the Academy of Life Underwriting.