Cutting Out Cigarettes Could Slash Life Insurance Costs, AA Ireland Highlights
With a number of people seeking to make changes in 2017, AA Ireland is highlighting that the decision to quit smoking can help you make significant savings on your life insurance in the long run.
While quitting would save the average smoker approximately €2000 annually as a result of no longer purchasing cigarettes, permanently quitting could lead to even more savings.
An analysis of AA Life Insurance customers found that smokers pay on average 90%-100% more than non-smokers for cover. However, with the majority of insurers an ex-smoker will be classified as a non-smoker if they have maintained a tobacco-free lifestyle for a period of at least 12 months.
“The benefits to your health and to your pocket when it comes to quitting smoking are mostly well known. However, one area that tends to be overlooked is the impact that ditching tobacco can have on your life cover,” AA Director of Consumer Affairs, Conor Faughnan highlighted. “Given that protecting their family’s future is one of the main reasons people take out life insurance in the first place, going smoke free means that this protection becomes significantly more affordable, while also leaving you with more money in your pocket to enjoy with your family.”
Meanwhile, in good news for users of e-cigarettes, vaping is unlikely to have any impact on the cost of life insurance.
Recent analysis from Healthy Ireland highlighted that 32% of those attempting to give up smoking used e-cigarettes as a quitting aid. Currently those that vape but do not use tobacco are rated as non-smokers by AA Life once they have been tobacco free for more than 12 months; although other insurers may take a different view. However, even if an ex-smoker is in the process of quitting, lying about their past tobacco use may have a negative impact on their policy.
“If you non-disclose smoking or claim to have been tobacco-free for 12 months on more when this is not the case and then a claim is made on your policy, an insurer is able to decline to payout or reduce the payment accordingly – even if the reason for your claim is not related to smoking,” Faughnan added.
“Given the large difference in the cost of cover for smokers and non-smokers it may be tempting for a smoker or someone attempting to quit to lie about their behaviour. However, given that one of the main reasons for purchasing life insurance is to protect a family home or provide for a family, then the risk of the insurer refusing payout on the policy is too great, irrespective of any savings.
A 2016 report from AA Life Insurance found that as many as 4 in 10 smokers had lied about their habits when applying for life insurance.
