Save thousands in just twelve months

Published 01st Jul 2007

There are many positives associated with giving up smoking, especially when it comes to your health, but the impact it will have on your financial health is also a worthwhile consideration

British smokers packing in the fags come 1 July 2007 could typically save between £2,000-£3,000 on their life insurance premiums, and heavy smokers will double that with the amount they save in their first year of quitting.

Life insurance cover of £100,000 for a 35-year old smoker over the next 25 years would cost £17.90 a month with Norwich Union, however a non-smoker would pay just £10 a month – saving almost 45 per cent or £2,370 over the policy term – whilst a non smoker would pay £3,150 less with LV=.

Emma Walker, head of life insurance at moneysupermarket.com said: “The upcoming smoking ban has inspired 1.2 million smokers to say they intend to quit by 1 July, so if you’re keen to give up, you should find plenty of support from others in the same position.

“The premium difference between a smoker and a non-smoker is vast and there are considerable savings to be made simply by shopping around for the cheapest deal to suit your circumstances.

“In order to be classed as a non-smoker and qualify for life-insurance premium savings, insurers insist on smokers having packed it in for a full year. Once smokers have given up for 12 months, they should go back to their insurer and ask for non-smoker rates, subject to tests to prove they have quit.”

This is echoed by Richard Brown, chief executive of moneynet.co.uk: “Smokers wanting life assurance will find they face more than double the premium of a non-smoker. A 60-year-old male smoker wanting £100,000 worth of life cover over 20 years will be charged £191.30 with Norwich Union - getting on for £2,300 a year. Add to that the cost of a packet of 20 – around £5.50 – and that habit is costing around £4,300 a year – that’s £86,000 over a 20 year life cover period.

“By contrast, a non smoking 60-year-old would pay less than half - £93.70 - and the additional £2,000 a year could go into a savings account earning 6 per cent, rather than going up in smoke. Basically, the cost of premiums double when smoking is taken into account – and these will inevitably become more expensive as the policyholder gets older.”

“Many people are tempted to lie about their smoking habits when applying for life assurance, but this is a false economy. Should you become ill or die from a smoking related condition, your insurance won’t pay out, letting down you and the family dependant on you. Whichever way you look at it, it is a very expensive habit.”
By Ariane Buteux

Source: ' Personal Finance & Savings '

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