Friday, March 15, 2013

"Vaping" vs Underwriting

Fellow insurance blogger Jeff Root poses an interesting question about life insurance underwriting and e-cigarettes: is "vaping" (e-cig users' preferred term) the same as "smoking?"

Leaving aside any health or social aspects, the issue becomes what rate class one may expect to receive if one uses e-cigs. Most life insurance applications ask about "tobacco use," so carriers seem as concerned about the nicotine as the smoke itself. But e-cigs don't really "combust" in the way that tobacco cigarettes (or cigars or pipes) do.

Jeff found that most carriers don't make that distinction, and consider e-cig users the same as those who light up their Marlboros. He notes that one company - Prudential - does offer a slightly better rate class for e-cig users than their conventional cigarette-smoking brethren.

I emailed my underwriter for our primary company to see what she has to say about this:

"Just saw an interesting blog post on e-cigarettes and life insurance underwriting. I hadn’t even thought about it. As far as I know, none of my clients use these, but who knows when I’ll run into someone who does?

From what I can tell, these things generally include a liquid form of nicotine, but no tar, etc from smoke. Here’s what it says at Wikipedia:

“Liquid for producing vapor in electronic cigarettes, known as e-juice or e-liquid, is a solution of propylene glycol (PG) and/or vegetable glycerin (VG) and/or polyethylene glycol 400 (PEG400) mixed with concentrated flavors, and optionally, a variable percent of a liquid nicotine concentrate … When heated, propylene glycol breaks down into H2O (water vapor) and CO2 (carbon dioxide)”

So far, doesn’t seem the same as tobacco smoke, but what I’m having difficulty finding out is where the nicotine comes from (is it extracted from tobacco leaves? If so, then technically this would be “tobacco use,” no?).

So I guess my question would be: would someone who is in generally really good health but uses e-cigs qualify for “[a better rate class than traditional cigarette smokers]?

Be interesting to she what see has to say.

ADDENDUM: It occurs to me that the same issue arises when we look at other types of policies, as well; how do health, disability and long term care underwriters look at this? Methinks I have some more emails to fire off...
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