Can't add up? - Do you smoke?
Filed under: Personal Finance
If you smoke, you probably can't add up, according to policy comparison firm Defaqto. That's not exactly what they said. They said: "Smokers could save nearly £2,000 on life insurance by quitting mid policy." But to save that much in a year, smokers would need £3.3m worth of life insurance.Smokers could save about £60 a year for every £100,000 of life insurance, according to Defacto's figures. They'd save more than 30 times that just by giving up smoking. They could save £2,000 on £100,000 of life insurance, but it would take 33 years.
When you get to the details - actually the first sentence of the release, it says "Smokers save as much as £1,640 a year by quitting but could also benefit from cheaper life assurance even if they were smokers when they took out their policy." That figure is based on smoking 15 ciggies a day.
Prices 62% higher
Ben Heffer, Insight Analyst at Defaqto says, "For a male aged 25, wanting £100,000 of life assurance, if he smokes it will cost him on average 62% more than if he is a non-smoker."Typically, for a 25 year old in good health a £100,000 of cover costs between just £5 and £7 per month, roughly the cost of 20 cigarettes; a smoker could pay as much as £10 or £12 per month."
And this key. It costs about £5 a month more for £100,000 of life insurance if you smoke. That is less than the price of a packet of fags.
Premiums just 1% of savings
If you smoked Defaqto's regulation 15 ciggies a day, the savings on your life insurance would be less than 4% of the savings you'd make by giving up. If you were a heavy smoker, the life insurance premium cut would be as little as 1% of your savings by not buying cigarettesThree providers will give a discount for those wearing nicotine patches:
- HSBC
- Police Mutual
- Scottish Provident.
Several others give discounts if you have quit for a year. These include:
- Aegon Scottish Equitable
- AXA
- Bright Grey
- Bupa
- Fortis Life
- HSBC Life
- Legal and general
- LV=
Fancy a smoke?
It strikes me that if you can afford to spend £1,640 a year to smoke, you can afford to spend an extra £60 a year for your life insurance. In fact, it's almost worth taking up smoking, it seems such good value.
