How Does Life Insurance Know You Smoke? 
If the company requires a paramedical exam with blood , urine or saliva they will know because the test for nicotine . Otherwise the company takes your word for it . If you lie on an application and it is later found out the company can refuse to pay a claim if a death occurs within two years of the policy issue date . You may also be required to pay back the difference in premium or have your policy rescinded and your premiums returned . 