Tag: life insurance

How do UK life insurance companies define a ‘smoker’ and a ‘non-smoker’?

Posted by – April 2, 2013

When you fill out an application to apply for life insurance you will be sent a long questionnaire to fill out. It is primarily on the basis of this that your life insurance premiums will be decided.

So how do UK life insurance companies define a ‘smoker’ and a ‘non-smoker’?

There are generally two different types of questions asked on these forms to determine whether or not you are a smoker. The following two examples are taken from the application form for the Legal & General Whole of Life plan although you are likely to find very similar examples elsewhere.

1. Have you used cigarettes, cigars, pipes, or nicotine replacements in the last 12 months – including occasional use?
2. If you smoke cigarettes how many do you, or did you, smoke on average each day?

 

The first question was found in the first section of the questionnaire entitled “Initial Client Details” and the second in “General Health and Lifestyle”. What this may imply is that the companies are attempting to obtain an honest answer by catching the reader off-guard. Moreover, it implies that the moment an employee of the firm sees the answer to that question your application is sorted into a particular pile right away.

It may surprise you to learn that it is on the basis of the first question that life insurance companies will decide whether or not to class you as a “smoker”. If you said “yes” to this question, even if you only had one cigar last Christmas, then you are going to be asked to pay the far higher insurance premiums that the insurer asks of all smokers.

“..If you are an occasional smoker looking for a life insurance policy it is perhaps best shopping around..”

You may, of course, end up paying far lower premiums than someone who later divulges that they smoke a pack a day. However, as we have already discussed, the difference between what a smoker and a non-smoker pay is large enough in itself.

There are, however, some companies who give a small “occasional smoker’s” allowance – they enumerate the number of cigars/cigarettes they believe an occasional smoker should smoke in a year and if you can say that you smoke fewer than that you will not have to pay the smoker’s premiums.

Most companies quote a number of around one a month or twelve a year. If you are an occasional smoker looking for a life insurance policy it is perhaps best shopping around until you find one of these as it could make a considerable difference to the amount you pay. The best way of doing this is usually to try talking to one of the company’s sales representatives and asking them to clarify their stance on occasional smokers.

How do UK life insurance companies define a ‘smoker’ and a ‘non-smoker’? – 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.

Do You Wonder If You Could Stop Smoking in an Easy and Cheap Way?

Well, I am now a complementary therapist, author of the really easy to use stop smoking EFT 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:

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: