The OP is talking life insurance, not health insurance.
I worked for farmers insurance, country financial and my current employer (not telling for obvious reasons). I sold quite a bit of life insurance for these guys and as a cigar smoker myself ill tell you how it works from the inside:
Life insurance rates are set on a tier and in 3-4 groupings. The groups are generally bad, good and best ( maybe one more higher or lower tier) then you're structured within that group from A to Z. The rates vary for each group and up and down each pyramid. Being an A in the good group will still never be better than a Z in the best group.
Generally the best group excludes everyone with ANY issues so it gives the absolute best rates. This is why they exclude all smokers. Even casual.
Also do what you will with this...after 2 years of a life policy being in force the only thing that will terminate it is a lack of premium payment.