Health insurance premiums are set according to an insurance company's decisions regarding an individual's well being. Tobacco use tops the lists of those things insurers feel potentially put a policy holder's health in jeopardy. Chewing tobacco is considered less dangerous than smoking, but still has a stigma that insurance companies usually include in the policy holder's premiums.

Tobacco use causes more preventable deaths than any other factor. Statistics show that 400,000 Americans die each year because of tobacco use. Another 50,000 nonsmokers are killed by second-hand smoke. Health care costs for tobacco users approach a hundred billion dollars annually. It follows that insurance companies consider the tobacco using population at risk and set health insurance premiums accordingly.

Tobacco use alerts insurance companies that a potential policy holder is more likely to develop life-threatening traumas. Tobacco users also put family members at risk because of second hand smoke, which makes their coverage cost more also. Smokers who manage to break the habit could qualify for lower health insurance premiums after a set period of time during which they don't again take up tobacco use.

It isn't only insurance companies that look to make tobacco users pay for their habit. Employers at many firms across the country demand that those employees who use tobacco pay more for participating in company health insurance plans. Smoker surcharges have become the method used to pay for increased health insurance premiums. There is also the prospect of getting fired if an employee is caught lying about tobacco use.

A few states have begun making tobacco using employees pay health insurance surcharges. Chances are that more states, cities and towns—most strapped for cash—will join the movement to cut costs by charging tobacco users more for health insurance plans.

Another side to company provided health insurance is that nonsmokers can expect to pay less for their individual and family coverage. Over the long haul, healthier employees are more productive, cost less to insure and take fewer sick days. And in today's sagging economy American industries can't afford to ignore anything that adds to the bottom line.

Insurance companies expect policy holders to be completely honest when applying for health insurance coverage. Failure to inform an insurer about tobacco use could cause benefits to be lowered—a factored response to what the policy holder's premiums should have been. Most insurers don't care if a client takes up smoking after initially qualifying for health insurance. But if the policy is lapsed, taking on a new policy requires providing tobacco use information to potential health insurers.