The lowdown on life insurance for smokers

We all know smoking is bad for our health and our pockets. The Government puts a high tax on every packet to make us think twice before lighting up. But tax isn’t the only way smokers get stung financially. Life cover for smokers is more expensive too.

Smoking and life insurance simply explained

There’s good reason for this. Statistics show that smokers are more likely to claim on their life insurance or critical illness policy because they are more at risk of death or disease. As a result, smokers will have to pay a higher premium than a non-smoker for the same cash payout. Heavy smokers will also often end up having to pay more than those who smoke smaller amounts.

If you’re thinking about giving up for good? You’ll find some great self-help tips to stop smoking.

How does the cost of life insurance for smokers compare?

Take a look at this comparison of non-smoker and smoker premiums for SunLife’s family life insurance.

Assuming both are living at the end of the term, the smoker will have paid over 75% more than the non-smoker.

Smoking is expensive enough these days. When you add on the higher price of life insurance, smoking becomes even more costly.

Age	35 year old	Monthly premium
Term	20 years	Non-smoker	Smoker
Cash payout on death	£200,000	£12.56	£22.48

Premiums shown are as at 18 August 2016.

I’m not really a smoker… am I?

You might think that a cheeky cigarette on a Saturday night, or a cigar on a special occasion doesn’t make you a ‘proper’ smoker, so the higher smokers’ premiums wouldn’t apply to you. But the fact is, insurers don’t distinguish between occasional and regular smokers.

 

What about E-cigarettes and life insurance?

E-cigarettes have grown massively in recent years. According to Action on Smoking and Health (ASH, 2.8 million adults in Great Britain are currently use e-cigarettes).

E-cigarettes are thought to have less health risks than standard cigarettes and many smokers are making the transition. However it’s still early days and at this point in time, insurers still consider you a smoker if you use e-cigarettes.

As the long-term effects of vaping and e-cigarettes aren’t yet known, it’s difficult for insurers to make a call on the level of risk, so they’re erring on the side of caution. But as more research is done, this could change, potentially for the worse.

 

What if I say I don’t smoke?

With premiums being so much higher for a smokers’ life insurance, it might be tempting to bend the truth when you apply for cover. As enticing as this may be, it really does pay to be honest in the long run.

At any time, insurers could ask for a saliva or urine test to check if you smoke. They could do a spot check or ask your GP for details of your medical history where there may be tell tale signs you smoke or have recently smoked, even if it’s not clearly stated.

Dishonesty could also have a devastating effect on the people left behind if you die. If a claim is made on your policy, the insurer could choose to investigate further. And if they discovered you’d lied about being a smoker, they could reduce the cash payout significantly or even completely refuse to pay out.

 

What if I quit?

Kicking the habit can only be good for you and your pocket. Life insurance providers consider you a non-smoker once you’ve not used tobacco products for 12 months or more, so it makes sense to quit sooner rather than later.

Once you’ve not smoked for 12 months, it’s worth contacting your life insurance provider to see if they are able to reduce your life insurance premiums.

Alternatively, if you’re committed to quitting but haven’t taken out life insurance yet, you might consider getting cover for a short term now and then taking out a new policy for a longer term as a non-smoker, and enjoy lower premiums.

Whatever you do, giving up smoking will certainly make a big difference to your finances. You’ll save money and your body will thank you too.

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