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Smoking doesn’t just affect your overall health and your back pocket, but it can also impact life insurance. If you’re among the more than two million Australians who are daily smokers and wondering what your policy options are, Savvy can help.
You’ll be able to compare life insurance policies online side-by-side with us to help you see what policies may be available to you based on your profile. Get a quote with Savvy today and compare their cost, coverage, exclusions, benefits and more before you buy.
Can I get life insurance if I’m a smoker?
You may be able to get a life insurance policy if you're a smoker, provided you can also satisfy your insurer’s eligibility criteria. Almost all insurers will offer coverage for smokers, but the cost of your life insurance coverage will be much higher because of the increased risk associated with smoking.
If you're a smoker, you can take out many types of life insurance policies, including life, trauma, income protection and total and permanent disability (TPD) cover. These policies can offer crucial financial protection to policyholders and their loved ones in the event of their critical illness, temporary or permanent disablement, terminal illness or death (depending on the type of cover you buy.
When you apply for term life insurance online, your insurer will evaluate your risk based on several criteria, including whether you smoke, the policy you choose and the level of coverage you want. The premium you pay will reflect the fact that smokers pose a higher to insurers and are more likely to make a claim down the track. According to the Australian Bureau of Statistics Smoker Status Australia Report 2021-22, smoking is one of the largest preventable causes of death and disease in Australia, with an estimate of almost 20,500 Australians passing away each year as a result.
You must disclose whether you smoke to your life insurance company, including if you're a social smoker, use an e-cigarette or a vape, patches or smoke a pipe or cigar. Failing to declare your habit could see a claim rejected down the line and your benefit not being paid out.
What’s the cost of life insurance for smokers vs non-smokers?
Life insurance premiums for smokers can be as high as two to three times more than those for non-smokers. According to data from Compare Club, smokers pay 62.5% more on average than non-smokers*. For example, if you’re a 45-year-old male living in NSW and want $500,000 in life insurance coverage, you may pay $362 per year if you didn’t smoke, while your policy might set you back $965 if you did*.
If you’re a smoker, it pays to compare with Savvy to help you find the best policy for your needs among a panel of trusted insurers. By comparing quotes through us, you can gain a better understanding of what options are available for your profile on the market right now. Considering quotes side-by-side can also help you work out which is the most affordable offer from our panel which offers the cover you’re looking for.
*Data from Compare Club correct as of November 2021.
How long does it take to be considered a non-smoker?
You’ll need to have not used tobacco or nicotine-related products for at least 12 months to be classified as an ex-smoker, but this can vary depending on who you purchase your policy with. In many cases, the top insurance companies in Australia will offer you coverage at a reduced premium once you reach 12 months smoke-free, potentially saving you a significant amount of money overall.
Changing your policy won’t necessarily be as simple as stating that you’re now an ex-smoker, though. Before allowing you to change the terms of your life insurance, some insurance companies may require you to take a medical exam or a blood test to prove you're no longer smoking. However, this won’t always be the case.
What else will insurers consider when I apply for life insurance?
How much you'll pay for life insurance as a smoker will also come down to a range of other factors, including:
- Age: as you get older, the cost of your life insurance premiums will increase. Additionally, insurance companies have maximum eligibility ages for new customers. For instance, in many cases, you won't be able to get income protection insurance if you're above the age of 60 or 65, while the age limit may be extended to 75 for life cover if you meet your insurer's criteria.
- Gender: if you're a woman, you’ll likely pay less for your life insurance policy because of your longer expected lifespan. This is one of many factors in determining the cost of a policy, but life insurers will consider it when you apply.
- Your covered amount: the cost of your premiums will change based on the level of coverage you buy. For instance, with life cover, you may be able to choose from an amount ranging from $100,000 upwards, with the greater sum insured leading to a higher premium. While a higher benefit may be more suitable for your loved ones, over-insurance will cost you more overall.
- Your overall health: your insurer will likely review all elements of your health. This means that if you have any pre-existing conditions which your insurer deems a high enough risk, you may be subject to higher premiums or specific exclusions relating to that condition. Additionally, your weight and blood pressure may be examined to help paint a picture of your overall health.
- Your job: professionals in higher-risk occupations often pay more for their life insurance (or may be denied coverage outright in some cases). This is due to the inherent dangers of working in occupations such as those with exposure to disease, hazardous substances and heavy machinery which can increase your chances of making a claim.
- Your hobbies: if you’re the type of person who prefers settling in front of the television over going outdoor rock climbing or abseiling, you may save money on your life insurance. Life insurance companies consider your pastimes and factor them in when determining how much you’ll need to pay.
- Stepped or level premiums: stepped premiums increase over time as you get older, while level premiums stay the same over the life of your policy (rising only with inflation), meaning the cost of your policy will remain largely consistent across your lifetime. This means that while stepped premiums are typically cheaper when you’re younger, your premiums when you’re older may cost more than if you held a policy with level premiums.
Types of life insurance
Life cover can pay a nominated beneficiary a lump sum if you’re diagnosed with a terminal illness or pass away. This type of insurance can provide your immediate family or another loved one some financial assistance to cover funerals, medical costs and day-to-day expenses.
If you’re injured or too sick to work for an extended period, income protection insurance is designed to help you focus on your recovery. You can be covered for up to 70% of your usual wage for a chosen period, such as five years or up to age 65, depending on the level of coverage you buy.
This type of insurance is designed to offer cover to those who are permanently disabled by injury or illness and are no longer able to work. You can choose to take out cover for an inability to work in your current job or in any role suited to your qualifications.
Trauma insurance is a type of policy which provides you with a lump sum payment in the event of a critical illness or major accident. The conditions eligible for claims will be outlined in your insurer's PDS, but can include cancer, heart disease, severe head trauma and cardiovascular disorders.
Why compare life insurance through Savvy?
How do I apply for life insurance through Savvy?
Frequently asked questions about smoker life insurance
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Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.
Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.