Quit smoking and save a bundle on your term life premiums

Where there is smoke... there’s high life insurance premiums.

Smoking: The Numbers Tell Why

Ever felt that it’s unfair for smokers to get charged with higher premiums? Here are some numbers that tell why:

  • More than 100,000 deaths have links to smoking.*
  • In the UK, some 86% of all lung cancer deaths are due to smoking.*
  • Overall, more than 25% of UK cancer deaths are caused by tobacco smoking.*
  • The hidden cost of smoking could reach £30,000 over 30 years.
  • The risk of premature death increases by 70% due to smoking.

*Based on a report by CancerResearchUK.org that reflects 2009 statistics

We all know the health hazards of smoking. It shortens life expectancy and makes you more susceptible to health risks. The thing is, despite the Surgeon General’s warning and well-publicized anti-smoking campaigns, people sometimes just can’t resist the lure of “enjoying a smoke”.

But smoking does not only burn a hole in one’s health – it does the same for one’s pockets when it comes to life insurance.

A smoker’s life insurance premiums will be considerably higher than a non-smoker of the same age, same coverage and same general situation. In fact, smokers may expect to pay as much as twice or thrice the standard rate!

When applying for a term life insurance policy, one of the items that will be asked is your tobacco consumption in the last 12 months. This includes all products containing nicotine, such as cigarettes, cigars, chewable tobacco and even a nicotine patch.

When you are applying for a life insurance policy you will be inquired about your usage of tobacco products in the last 12 months. This includes all products such as cigars, cigarettes as well as chewing tobacco. The frequency of usage also needs to be mentioned.

Some sample premium computations (non-smoker vs. smoker):

Details Annual Premiums
Annual Premiums
Annual Savings
Savings for the life of the policy
45-year old male, with 10-year level term and £50,000 coverage £345 £621 £276 £2,760
35-year old female with 15-year level term and £150,000 coverage £136 £217 £81 £1,215
Joint policy, 30 year old male and female, 25 year term and £150,000 coverage £155 £261 £106 £2,650
Average annual insurance premiums £113 £209 £96  

Factors that could further affect a smoker’s premiums:

These are some factors that could drive premiums even higher, depending on how frequent the Person Insured smokes. In some instances, if an existing medical condition has severe symptoms, a smoking habit may cause the Insurance Company to decline the application.

Disclosing Your Smoking Habit

For those who are thinking of getting a term life insurance policy, your smoking (or quitting) is an important matter. When applying, it is best to be upfront regarding your smoking habits – that way, this will not be a matter that will affect your future claims.

The insurance company may cancel your policy if they find out that you have not been honest regarding your smoking, particularly within the waiting or contestability period. The waiting period is a time when the insurance company can contest any claims or cancel a policy due to misrepresentations of key facts about your insurance application.

This may be particularly disappointing if your family is making a claim only to be denied due to the fact that your death may have been attributed to smoking.

Applying for Lower Premiums

Depending on how your policy is built, your premiums may be up for review at specific periods. For instance, if you get a term life policy where the premium is renewed every five years, the life insurance company will go through the underwriting process to determine your new premium for the next five years.

This means that if you have already been paying high premiums due to the fact that you have been smoking, you still have the chance to get lower premiums for the next review. For premiums to be lowered and for you to be re-classified as a non-smoker, you may need to have quit for at least a year. This depends on the underwriting policies of the insurance company.

So if you want to save on premiums, we suggest that you study how you can kick the smoking habit. Once you do, you can enjoy a healthier and longer life as well as lower premiums!

Updated on: 05.06.2013

To secure your family's future, fill in the form on the right and get your term life insurance quote now.

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*Scottish Provident 2012 life cover claims paid report.