Would quitting smoking affect my life insurance cover?

Last updated on November 25th, 2021 at 03:18 pm by Bill Tsouvalas

What if putting down your cigarette could help you save much more than cigarette money, but also help you save on your life insurance premiums? Smoking can impact how much you end up paying and can make your premiums two to three times higher than someone who does not smoke. These are some of the things you need to consider when deciding on quitting smoking.

The effect of smoking on your life cover

With every drag a smoker takes they drag both their finances and their health down. Life insurance underwriters look at your health to determine how much cover you can get and what you should be paying in premiums. Smokers are most likely to pay higher premiums as this habit put their lives at risk. However, there is a silver lining for smokers who have quit smoking. Insurance premiums on your life cover are likely to decrease each subsequent year. But this means that you have to avoid any type of smoking for a period of 12 months – 3 years to receive the same rate that non-smokers get. You will have to read your insurer’s product disclosure statement (PDS) to find out how many months they require you to be smoke-free. Taking a short by quitting a few months before you apply for life insurance will not gain you any favours. Some insurers will require that you undergo a medical exam to test if you are smoke-free.

How much do smokers pay on premiums?

Smoking is an expensive habit too keep up once you analyse the cost it takes to spend on a packet of cigarette p.a., but it also impacts your premiums on your life insurance. For example, a male non-smoker who is 50-55 years and takes out a $500,000 life insurance policy will pay a monthly premium of $169. A man of the same age who does smoke who takes out the same policy will fork out an average monthly premium of $343. A female smoker in her fifties can pay 75% more than a non-smoker of the same age. The increase in premiums for smokers affects both young and old as this puts you at a risk.

You could save up to $10,000 if you quit

Quitting smoking a major step that anyone can take, but it is possible. It not only has health benefits, but it can help you save thousands of dollars in return. A study by Nerd Wallet revealed that people who quit smoking saved up to $10,000 (US). It could also reduce your premiums significantly giving you some extra cash to use on building your life insurance policy or elsewhere.

A few things to keep in mind

Quitting smoking means quitting anything that has nicotine in it. Some insurers also include vaping as smoking because the liquid contains nicotine. It is important that you read the fine print on what is consider smoking, and what is the period in which you have to quit smoking to get the benefits of a non-smoker.

Other things to keep in mind is to never lie on your application for life cover. It will be in your best interest to give as much detail as possible in order for you to receive adequate cover. It can also prevent your policy from becoming void. Your medical records or urine exams are most likely to reveal if you are still smoking so it is best to be honest.