Significance

• Some life insurers specialize in impaired risk. This means that the insurance company is willing to accept higher than normal risk for individuals who want to buy life insurance. They're willing to do this because they purchase insurance, called reinsurance, from other life insurers to spread the increased risk out among several other large insurance companies and also charge higher premiums for impaired risk policies.
  
  

Benefits

• Smokers can buy affordable term life insurance from an impaired risk insurance company when compared to a life insurer who does not specialize in impaired risk. This will save the smoker money over the long term, allowing him to purchase the insurance that he needs.
  
  

Drawbacks

• Premiums will always be higher for smokers than for non-smokers with all other risk factors remaining the same. This is because insurers' statistical data show shorter average lifespans for smokers than for non-smokers.