July 22 2017 Latest news:

Stopping smoking can massively reduce your life insurance premiums

To send a link to this page to a friend, you must be logged in.

We have recently had the latest No-Smoking Day – the annual event when people are encouraged to pack in the habit.

There is rarely a shortage of pressure on smokers to change their behaviour. Scare tactics are often used but campaigners can also opt for gentler approaches.

What is usually consistent, however, is the content of these campaigns, with a strong focus on health.

But on top of the obvious health grounds, there are also good financial reasons to stop smoking.

For a start, there is the increasing cost of tobacco. Against the backdrop of higher living costs, wage freezes and high unemployment, it is easy to see just how much smoking can make an ever-bigger dent in your pocket.

Following the recent budget, a packet of 20 cigarettes now costs an average of nearly £7.50. That means someone smoking 20 a day will spend about £2,750 a year on the habit.

If national insurance and tax are taken into account, a basic-rate taxpayer needs to earn approaching £4,000 a year to pay for it.

Heavier smokers, of course, will spend even more than this.

But even if you are a “casual” smoker and you puff away a lot less than this, you could still find yourself stung financially.

For a start, some home insurers will ask if you are a smoker because homes with smokers in them are often considered to be more at risk of catching fire.

But the real savings often come with life insurance policies.

According to price-comparison service Moneysupermarket.com, a smoker can pay thousands of pounds extra for life insurance and critical illness cover compared with their non-smoking peers.

So added to the cost of not having to buy tobacco any more, the savings can quickly mount up for those who give up smoking.

Emma Walker, head of protection at Moneysupermarket, said: “Not only can smokers reap the medical benefits of kicking the habit, they can avoid letting their hard-earned cash go up in smoke, too.

“With significant savings to be made, those who make the decision to quit should shop around for the best insurance deal to suit their circumstances.”

Moneysupermarket’s research demonstrates some of the savings people can make by stopping smoking.

A 30-year-old man looking to take out £150,000-worth of combined critical illness cover and life insurance could save at least £5,490 with Aviva over 25 years if he stopped smoking. A woman wanting the same level of cover could save at least £2,740 with Ageas Protect.

A word of warning, though: insurance companies consider ex-smokers to be “non-smokers” only a year after they have given up. You cannot stop today and immediately qualify for lower premiums.

Matt Morris, senior policy adviser at life insurance broker Lifesearch, said it was important to shop around for a better deal once you have become a non-smoker, but he warned that other changes in your health meant there was no certainty that you would be able to cut the overall cost.

He said cheaper premiums were not certain, as they also depended on age and health, but there was a very good chance that they would fall.

“It is important to make sure you have a new policy in place before cancelling the existing one, as a new policy could turn up some nasty surprises in underwriting and may even be declined if your health has changed,” he said.


Most Read

Most Commented