Quitting smoking can cut the costs of your life insurance premiums by a staggering 45%

Posted by David in Uncategorised | 0 comments

Last month marked the seventh anniversary of the public smoking ban in the UK, representing the success of the nation as a whole to shift societal attitudes and behaviour to a healthier and more positive future.

Whilst past attempts to implement the ban were staunchly rebuffed by generations of smokers who had grown up with the vice being commonplace, it was the sheer weight of medical evidence against tobacco-related products which eventually contributed towards the barring of smoking in public places. In particular, the NHS’s disclosure about the number of smoking related deaths each year proved to be the final chapter in tobacco’s appearance on the public scene, with an estimated 100,000 individuals a year identified to die from either direct or second hand smoking.

However, recognition of these concrete and decisive pieces of evidence against the merits of smoking was not only limited to policymakers; life insurance providers acknowledged the health risks of smoking and have subsequently applied far higher costs to the premiums of smokers than to non-smokers.

The reality is that if you desire to get a life insurance policy, you could save yourself as much as 45% over the course of your insurance term by quitting smoking. Take the example of a thirty year old, who decides to cover themselves for £150,000, overage a 25 year term. Under the deal they would likely receive from prominent provider Legal and General, they would have to pay a total of £3,669 over the 25 year term if they were a smoker. However, this figure would fall sharply to £2,208 over the same period if the thirty year old was not a smoker, representing a total saving of £1,461, or 45%.

The same trend is applicable to the costs of critical illness cover, and the same thirty year old would have to pay a staggering £4,590 more for being a smoker over a 25 year term, if they acquired a deal from Legal & General. This is because the monthly premiums would be over 50% higher for the smoker, rising to £45.44 from £30.14, clearly illustrating the merits of being a non-smoker when trying to obtain critical illness cover.

I’ve quit smoking but have an existing life insurance deal; what can I do?

If you decide to quit smoking whilst already holding a life insurance policy, then you should notify your insurer and request that they begin charging you non-smoker rates. Whilst the drop in the price you will be charged will not be substantial, it will nevertheless be significantly lower than it was before.

However, you should keep in mind that official classification as a non-smoker is only available after you have quit smoking for a total of 12 months, and as such, you will not enjoy the financial rewards of quitting smoking for an extended period. If this is something you are not prepared to do, then you will likely have to accept that you will pay higher premiums thereafter. However, you could also decide to use an alternate smoking device, such as an electronic cigarette, or a nicotine patch.

Linsey White, spokeswoman of the Association of British Insurers (ABI), said: ‘Individuals should contact their insurer and are advised to always disclose the use of e-cigarettes and any kind of tobacco or nicotine product when taking out a policy.

 

‘If someone has not used tobacco in last 12 months, and only uses nicotine free e-cigarettes, they may be entitled to answer no to smoking questions, but this should always be discussed with their insurer.’
Electronic cigarettes

However, if you are currently a smoker and are considering the acquisition of a life insurance policy, then there is still hope for you to reduce the costs of your premiums by either quitting smoking now, or switching to use an e-cigarette product instead. Whilst the jury is still out on the latter, some providers will charge lower premiums to users of electronic smoking devices, though this is only applicable to a handful of insurers at present.

This is because the tests that insurance companies conduct on individuals in order to determine whether they are a smoker or non-smoker consist of conducting what is called a cotinine test. This is substance which is internally created by the human body when it takes in nicotine, and is present in the blood, urine samples and saliva. As electronic cigarettes and other smoking alternatives contain nicotine, all tests that providers conduct on you will come up positive with cotinine traces if you use these products. As such, you probably will not be offered a cheaper deal as an electronic cigarette smoker for now, though this isn’t always the case and might change in the future as an official classification is given to the products.

Linsey White, spokeswoman of the Association of British Insurers (ABI), said: ‘Individuals should contact their insurer and are advised to always disclose the use of e-cigarettes and any kind of tobacco or nicotine product when taking out a policy.

 

‘If someone has not used tobacco in last 12 months, and only uses nicotine free e-cigarettes, they may be entitled to answer no to smoking questions, but this should always be discussed with their insurer.’

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