Smokers who kick the habit stand to make savings of over €13,000 on their life insurance policies, a new price comparison survey has found.
The study, published today by the National Consumer Agency (NCA), reveals that smokers pay as much as double the premium for the same level of cover as non smokers.
“If giving up smoking is your New Year resolution in 2011, bear in mind that as well as the immediate savings you’ll make, you could also cut thousands off the long-term cost of your life insurance policy, once you’ve been a non-smoker for 12 months,” said NCA director of public awareness and financial education Karen O’Leary.
She continued, “As well as checking to see what discount you could get from your current provider if you quit smoking, you could also consider switching to another provider to avail of further savings.”
The cost comparison shows that there a number of other ways to reduce the cost of life and mortgage protection insurance:
Consumers that give up smoking in the New Year should contact their insurer to notify them and ask for a review of their premium.
Depending on the provider, they may have to wait for up to 12 months to be considered a non-smoker, but the savings can be substantial. For example, a 30-year-old man with a €320,000 term life policy would reduce his premium with his current provider by as much as €32 a month if he gave up smoking. If he then switched to another provider he could cut his premium by a further €5 a month. This is a total saving of more than €13,000 over the 30-year term.
Smokers can make savings simply by looking for quotes from other providers.
The 30-year-old male above could save as much as €12.66 a month (€4,558 over the life of the policy) by switching. Smokers with dual term-life insurance and joint mortgage protection policies stand to make even bigger savings.
Couples that have individual policies could look for a dual policy, which pays out a benefit on each death during the term of the policy.
A couple, both 40-years-old and non-smokers, each with an individual €210,000 term life policy, could save as much as €82.80 annually by switching to a dual policy with their current provider. This seems like a small saving, but adds up to more than €1,200 over the term of a 15-year policy. If they switched to a dual policy with another provider they could save as much as €140 a year (€1,680 over 15 years).
Life insurance is a long-term product, unlike other types of insurance that are renewed every year. However, consumers’ insurance needs vary as their circumstances change. For example, having a child, getting a divorce or even changing job can mean that you need more, or even less insurance, so it is important to review life insurance cover every so often. Consumers taking out a new policy may need to undergo a medical examination, depending on their age, health or the amount of cover applied for.
Click here for the full life insurance cost comparison.
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