From FreeAdvice.com: https://law.freeadvice.com/insurance_law/life_insurance_law/insurance_lie_smoke.htm
- The lie may be fraudulent, and the insurance benefits for you and your family may be at stake. After a federal judge found tobacco companies “guilty of lying about the health effects of smoking,” some cigarette users who lie on their policies may consider themselves excused from charges of insurance fraud, and the motivation for misrepresenting their own health risks may be even more significant. Cigarette users may be motivated to lie in order to obtain either (a) lower health insurance premiums or (b) maintain eligibility for life insurance policy or rates. In some states, lying about smoking for insurance purposes is a material misrepresentation, just like lying about health history. In others, the face amount of the policy may be adjusted downward if the policy holder misrepresents his smoking status.
- While you may be tempted to lie about tobacco use in order to receive lower insurance premiums, misrepresentation of your smoking habits is considered insurance fraud. This type of deception, known as soft fraud, may not be as serious as other types of insurance fraud, but it can still carry a serious penalty. Committing an act of soft fraud is usually viewed as a misdemeanor. Consequences could include community service, probation, and even jail time. Deception is also likely to result in loss of some or all of your benefits (perhaps when you need coverage the most). Plus, insurance companies could force you to pay back lost surcharge fees.