Why is insurance more expensive for smokers?
Insurance companies increase the premium for smokers
because they represent a higher risk.
To start answering this question it will be useful to give
you the insurance companies’ usual definition of a smoker. A smoker
is usually defined as: -
“someone who used, smoked or otherwise
consumed
any kind of nicotine products during the previous 5 years.”
A few insurance companies shorten this definition to the
previous 12 months. If you have given up smoking during the previous 1
to 5 year period, your premium will be much cheaper by choosing an insurance
company which uses the 12 month definition. Contact the Help Desk at Brokers
Online on 01625 416 280 for more information.
When an insurance company calculates its premiums, it has
to estimate how long they think you will live. (Or with Critical Illness
Insurance, how likely you are to become critically ill whilst the policy
is in force.)
To do this the insurance company takes into account for
whether you smoke, your age, your occupation and your health record.
It is now widely accepted that smoking can damage your health
and insurance companies have research to support this view. Therefore,
insurance companies require significantly higher premiums from smokers
in comparison with non-smokers. All insurance companies will ask you questions
on your application about the type of and quantity of tobacco you use.
They will make use of this information to predict your future health and
this becomes an important part of their risk assessment.
The result is that even though some Pro Smoking Interest
Groups argue that smokers under the age of 40 have around the same probability
of dieing than non smokers, a typical man aged 25 can expect to be charged
up to 50 % more for a 15 year life insurance policy than a non-smoker.
It therefore, becomes even more important for smokers to
search for the cheapest possible insurance premium. That’s where
we come in!
Other relevant questions…
What impact
does my age have on my premium?
How does my medical
history affect things?
Is Life Insurance for me?
What else do I need to know about Life Insurance?
How do I get a Life Insurance Quote?
How do I choose the right policy for me?
What if I need cover to be arranged quickly?
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How are premiums calculated?
What if I have to make a claim?
Do I need Mortgage Life Insurance instead?
Should I consider Critical Illness cover?
What other sorts of Insurance should I think about?
How do I make a complaint?
What do I need to know about the law and Life Insurance?
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