Tag: cost

How does smoking affect the cost of UK life insurance?

Posted by – April 2, 2013

How does smoking affect the cost of UK life insurance?

Smoking can affect the size of your life insurance premiums in two different ways. Firstly, most providers will charge a smoker’s premium to anyone that says they have smoked within the last twelve months. However, there is another way that smoking affects premiums and that is by deciding the insurance band you will be assigned to. Insurers generally assign every applicant to one of three insurance bands depending on their level of health. These are: Standard, Preferred and Preferred Plus.

If you have smoked within the last year you will probably be assigned to the Standard band, no matter how often you exercise or how healthily you eat. Generally, insurers will not allow anyone into the Preferred band unless they can say they have not smoked within the last three years, and five years for the Preferred Plus band.


Over the course of your insurance term the difference in premiums between those classed in Preferred and Preferred Plus bands will usually amount to thousands of pounds. This means that even if you identify as a non-smoker, smoking can make a huge difference to the cost of your life insurance.

The most important difference is between regular smokers and those who have smoked within the last twelve months. In 2011, Sainsbury’s Financial published research which said that the average annual life insurance premium for a smoker was £209.76 while for a non-smoker it was just £113.88.

Over the course of a standard twenty year insurance term the difference between them adds up to £1917.6. What’s more is that this is only an average. Many smokers will be paying far higher premiums than this on the basis of the fact that they smoke alone.

Other research by the Money Saving Expert calculates that the hidden insurance cost of smoking could amount to over £30,000 over twenty years. The problem with this research is that it is a deliberately unrepresentative number, calculated on the basis of someone who has purchased term assurance, critical illness insurance, private medical insurance and permanent health insurance. As such, this should be treated as a maximum figure that helps to illustrate the fact that smoking makes health insurance a lot more expensive. To read more about how they calculate these numbers, go to: http://www.moneysavingexpert.com/family/quit-smoking-cheaply

The biggest difference between smokers and non-smokers is found with term life assurance and critical illness insurance – the two most common types mentioned above. A non-smoker generally saves 55% on the first and 50% on the second compared to a smoker. Term assurance is a type of policy which consists of an agreement that the insurer will pay out a fixed sum (or occasionally that they will cover your mortgage) if you die within a fixed term. This is the most common kind of life insurance and, unfortunately, also the most expensive for smokers.

Critical illness insurance is a form of insurance policy that agrees to pay out if you are diagnosed with one of a list of critical illnesses. It is another type of policy popular in the UK as it generally allows people to provide for their families in the event that they are rendered unable to work as well as helping cover the costs of medical care. The Money Saving Expert calculates that there is an average £24,000 price difference between smokers and non-smokers for this type of policy over the course of a twenty year term.

With private medical insurance you will only achieve a saving of 5% as they are generally based more on an assessment of your current rather than of your lifestyle. Permanent health insurance, or insurance that agrees to continue to pay your salary or wage if illness prevents you from working, generally differs by about 25%. Yet again, this amounts to a cost of thousands of pounds over the duration of the plan.

What is clear from all of these figures is that there is never any time when the affect of smoking on an insurance policy is small. Any calculation of how much money you would save by giving up smoking (by spending less on cigarettes, chewing gum, air fresheners etc.) will be out by thousands of pounds if it does not also take into account the cost of your life insurance.

How does smoking affect the cost of UK life insurance? – Extract gratefully copied with permission from http://www.lifeinsure.co.uk

My name is Suzanne Zacharia and I am committed to spreading the word about health options. I believe that the more and better options one has, the more choice there is.

A virus caught along with 5 other students at university at the end of 1986, plus medical negligence, meant that I got smokers lung at a relatively young age. In desperation for help with my symptoms and quality of life, I turned to complementary therapy, and I have outlived one doctor’s prognosis by many years now.

Are You a Smoker Who Would Like To Stop?

I am now a complementary therapist, author of THE stop smoking book at http://www.quit-smoking-ebook.com, where you can buy the book wherever you live, If in the UK, you can buy it here: