This article tells a true story. If you, a loved one, or someone you know smokes and needs life insurance, you’ll not only enjoy the story, but will want to learn how to achieve the good-news result.

The hero of this story is a young woman, Kelly (her real name). Kelly is a key employee of the insurance consultant (AZ) my estate planning clients normally work with. Her expertise is to search the market for the best insurance company and policy (type of coverage, cost and other policy features) to fit each client’s insurance needs. Kelly works closely with AZ.

The story has a 30 month timeline with eight key dates. The first key date was in…

March 2012. Joe, the owner of a family business (Success Co.) caused the purchase of two $4 million Universal Life policies for his two sons (heirs to Success Co.). The purpose of the policies is keyman insurance and buy/sell protection. A Preferred rate classification was out of the question. The best offer Kelly could get for Sam was a Standard Tobacco policy with North Ins. Co. carrying an annual premium cost of $44,540.

Not satisfied, Kelly submitted an application to South Ins. Co. under their “Quit Smoking Incentive Program.” This program allowed Success Co. to pay Standard Nonsmoking rates (only $34,981) for up to the first three years of Sam’s policy.

If Sam did not quit smoking during the next three years, premiums—starting in the fourth policy year—would skyrocket to $67,119 (Smoker rates). Ouch!

Sam’s reward, if he remained a nonsmoker during the three years (or a lesser period), would be the low $34,981 annual rate, permanently.

Kelly implemented the South Ins. Co. policy.

March 28, 2013. Kelly contacted Joe, who happily reported that Sam had quit smoking. Then Kelly arranged for the necessary medical tests to prove that Sam had indeed quit smoking. Victory! Sam passed the test.

May 10, 2013. South Ins. Co. removed the Tobacco rating from the policy and permanently applied Nonsmoker rates ($34,981). The changes were instigated by Kelly.

May 17, 2013. Kelly explored the possibility for Preferred Nonsmoker rates for Sam. Because he had only been cigarette-free for 15 months and his still overweight condition, preferred rates would not be available for about one more year.

February 15, 2014. Once again Kelly contacted Joe. Good news: Not only had Sam remained tobacco free, but he had lost some weight. Kelly initiated the underwriting process (sending all of Sam’s medical history and other required information to the insurance company, to be followed by a new physical examination) with East Ins. Co .The target was Preferred Nonsmoker rates… a low premium of $24,688 annually.

May 14, 2014. East Ins. Co. offered Standard rates. Kelly thought she could do better and decided to continue the search for a better offer/rate class.

June 27, 2014. A recent diagnoses put a few flies in the ointment: Sam had sleep apnea and an incident of atrial fibrillation. The hope for a Preferred rating was history. But Kelly was able to locate a Standard Nonsmoker rate with West Ins. Co. for a low annual rate of $26,200.

September 5, 2014. The West Inc. Co. policy was implemented for $4 million of Universal Life coverage with a $26,200 annual premium.

Both Joe and Sam applauded and thanked Kelly and AZ.

Note: All names, except Kelly, whether an individual or an insurance company (although real people and real companies) are changed in the story above.



There are several lessons to be learned from this story: (1) If you are a smoker and determined to quit (forever), find an insurance consultant (or one with a staff person like Kelly) who is willing to take the time to follow up and search the market to get you the “best” policy. (2) If you have other medical conditions (like cancer or heart problems) that you conquer (usually after five years of no symptoms), premiums can usually be lowered… on either individual or second-to-die policies.

And (3), if you have existing policies and either the issues in (1) or (2) above, find an insurance agent willing to take the time to find you a policy with the same dollar amount of coverage at a lower premium.

Articles like this often raise questions. Got a question about your insurance coverage or want to have your current insurance portfolio reviewed?… Then call me (847-674-5295) or email me (

Free special report:

How to transfer your business (to your kids), yet keep control


When closely help with business owners call me for help with their business successions plan they typically have two goals:

- Get their business out their estate (particularly when it is growing in value) in a tax effective manner

- keep control for long as they live

it is a rare that the business owner finds an advisor who knows how to accomplish both goals.

this special report shows you how to keep absolute control of your business while transferring it to your successors.

Download Now!

Free Special Report:

How to legally eliminate your state tax liability


When people of means contact me to help do their estate plans (or review their existing plans), they typically have two goals concerning their estate tax:

- Reduce their potential estate tax liability

- Make sure there is enough liquidity to pay the potential estate tax liability

Well, my goal and the goal of this special report is to show you how to eliminate your potential estate tax liability whether you are young or old , married or single, insurable or uninsurable.

Download Now!

Was this useful? Share it with others who would benefit from it.

Related Post

Do you have a question of this topic?

Fill this form and I will personally answer you.

Your Name (required)

Your Email (required)

Phone (required)


If your question(s) or concerns(s) relates to your business, please fill in these fields as well:

Type of your business:

Number of employees:

 I agree