It can be more difficult to find life insurance
if you are a smoker and it will cost more due to the health risks associated with smoking. This guide provides information on how smoking can affect your life insurance.
How could smoking affect your life insurance cost?
Due to the health risks of smoking (such as cancer, angina and heart disease), you will pay more for life insurance cover. According to MoneySuperMarket data (2018), the average non-smoker pays £9.96 per month for decreasing term insurance, but an average smoker pays £21. That is an 111% increase. In terms of the cost of adding critical illness cover to your policy, smokers pay 63% more for level term life insurance with critical illness cover on average. Critical illness cover pays out a lump sum if you are diagnosed with a certain illness named in the policy (whereas life insurance pays upon the event of a death).
Age is also a factor in this. Premiums can cost a third more for a 30-year-old smoker, and up to double the cost for a smoker aged 50. Despite smokers paying a higher premium, you will receive the same amount if you become ill or die as a non-smoker. There are no insurers which specialise in life insurance for smokers, but most insurers should consider your application. Just be aware that if you have smoked for a longer period of time, fewer insurers would be willing to cover you.
Disclosing the Fact that You Smoke to Insurance Providers
When applying for insurance, you will be asked questions regarding your health. Some of these will be about smoking, for example whether you have smoked in the past year and how often. It’s important to answer these questions honestly, even if you only smoke socially or occasionally, as casual smokers are still considered smokers by providers. However, some companies are more lenient if you do not smoke often, so it’s worth shopping around to find the best deal. If you lie, this is classified as ‘material misrepresentation’. Insurers generally do not make a distinction between cigarettes, cigars, pipes, e-cigarettes and nicotine replacement products such as patches.
It is very risky to lie about this. Insurers can ask for a urine or saliva test to find out whether you smoke, and they may even contact your GP for information on your medical history. Also, if your death is attributed to a smoking related illness, and you hid the fact that you smoked from the insurer, the policy is unlikely to pay out, or pay a smaller amount at best.
What if you quit smoking?
You must quit smoking, or using any nicotine products, for at least 12 months to qualify for lower insurance premiums. If you are nicotine-free for this amount of time and tell your life insurance provider to update your policy, you may get a reduced rate on your premium. However, it’s not guaranteed. For example, if you have smoked for 50 years and quit, insurers may argue that the damage has already been done, meaning there is a higher chance they will be paying out on your policy.
Although most companies consider you a non-smoker if you are nicotine-free for a year, some companies require you to be a non-smoker for as long as five years. Insurers will often seek a report from the policyholder’s doctor, and if necessary, ask for a chest X-ray. Your age and the value of the policy will also be taken into consideration when you inform the company that you have quit.
Over 50s Life Insurance
Smokers may consider an over 50s life insurance policy, as this type of cover guarantees acceptance if you are over 50, regardless of whether you smoke or have poor health. This can be useful because some providers do not accept smokers. 50% of people could achieve a quote of £24.08 per month (Assured Futures Data, 2019)
This insurance policy covers you if you are over 50 years old and pays out a lump sum to a person of your choice when you die. Most insurers set a limit on the premiums you can choose from, such as a minimum of £5 and a maximum of £100 per month. Also, the older you are, the less the payout will be. Most of these policies require you to pay premiums until your death, but there are some policies that stop taking premiums when you reach a certain age, or when you have paid for a set duration.