Ya, don't bother lying, it's only going to hurt you in the long run.
As far as financially, my brother in law said it costs him an extra $23 a month insurance wise to tell the truth about his cigar smoking.
I think the shittiest part about the whole insurance thing is, they don't care if you're smoking a half dozen cigars a month or 2 packs of cigarettes a day...it all pays the same to them.