Prudential Plans to Boost Life Insurance Prices for Vapers
Vaping has come under scrutiny as officials investigate lung-injury cases associated with electronic cigarette use.
(Bloomberg) -- Prudential Financial Inc. says the health scare around vaping is changing its calculus.
Prudential, one of the largest U.S. life insurers, plans to tweak its policy for customers who vape, saying that they’ll be classified as smokers instead of non-smokers when applying for individual coverage. Smokers tend to be charged higher life insurance rates than people who don’t smoke, the company said in an emailed statement Wednesday.
Vaping has come under scrutiny as officials investigate lung-injury cases associated with electronic cigarette use. The director of the Centers for Disease Control and Prevention Robert Redfield said last week that the more than 1,000 cases identified already could just be “the tip of the iceberg” of the threat from vaping. Retailers including Walgreens Boots Alliance Inc. and Kroger Co. are halting the sales of electronic cigarettes amid the outbreak.
“Increased attention on vaping over the past few months and linkages to a few deaths and multiple illnesses, have resulted in warnings from the FDA, federal government and some states banning the use of flavored e-cigarettes,” Prudential said in its statement. “In the coming weeks, and consistent with industry shifts, Prudential will reclassify users of e-cigarettes to treat them as smokers and in line with our cigarette smoking guidelines.”
Prudential’s rates for e-cigarette users tended to be more favorable than others in the industry, according to Nicholas Mancuso, a manager at online broker Policygenius. Brighthouse Financial Inc., which was spun off from MetLife Inc. in 2017, has always classified vapers as tobacco users in its applications, according to a spokeswoman.
Companies had varied approaches to vaping, with some putting it into the non-smoking category because of a lack of data on the health impact, according to Insurance Information Institute spokeswoman Loretta Worters. Given that the industry is just starting to learn about the long-term effects of vaping, insurers tend to be cautious, Mancuso said in an email.
Representatives for New York Life Insurance Co. and Massachusetts Mutual Life Insurance Co. had no comment on how they treat vapers for life policies.
Smoking is the leading cause of preventable death, according to the CDC, and is responsible for killing more than 480,000 people a year in the U.S. Andrew Komarow, co-founder of financial planner Tenpath Financial Group, said he found it was more common for vaping to be treated as similar to smoking.
“For the most part, insurance companies are very conservative,” Komarow said. “They treat nicotine or vaping essentially as smoking cigarettes.”
To contact the reporter on this story: Katherine Chiglinsky in New York at kchiglinsky@bloomberg.net
To contact the editor responsible for this story: Michael J. Moore at mmoore55@bloomberg.net
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