Do some Life Insurance companies specialise in smokers?

In the UK there are no life insurance companies specialising in smokers. The reason for this is that smokers have a higher chance of dying tand it is not particularly cost effective to insure a smoker's life. However, an insurance company can charge quite a high amount in premiums for a smoker. Sometimes, it can be almost 3 to 4 times the level of premium for a non-smoker. They can make a good deal of money out of this should you not die during the term (should it be term insurance).

What is very important is that should you be a smoker, you should do as much research as possible, and search the market as comprehensively as you can, because you can save quite a bit of money.

Should you be a nicotine user in any form you will be classified as a smoker, regardless of how you use nicotine or tobacco. Even though many smoking lobby groups insist that smokers under 40 have hardly any more chance of dying than non-smokers, a 25 year old smoker is charged around 44 percent more for a 15 year term insurance policy than a non-smoker.

It is true that some companies will actually classify some smokers as non-smokers. Some insurance brokers will find you companies that classify cigar smoking as non-smoking. These companies will probably require some conditions on this. This may be around the amount of cigars you smoke (i.e. 1 or 2 per month is OK), and you may have to undergo a medical, which needs to show no nicotine traces in your system at all. You should bear in mind that cigar use in the 10-20 days prior to the examination will probably show up traces of nicotine.

A few companies do not classify tobacco chewers, patch users and pipe smokers as smokers. Again, search the market or use broker to find these.

If you have quit smoking cigarettes but find that you are still being charged as a smoker, you should search the market rigorously. Companies may differ in terms of the number of smoking-free years they require before you are not a smoker. It could be as low as one year and as high as 5. Companies stipulate these lengths of time as the damage done by smoking lasts well after you have quit.

It may be cold comfort, but should you be a smoker and actually make it through to retirement, you may find yourself slightly better off. You have to buy an annuity, and you will find that a smoker will receive a higher annuity rate than non-smokers, as they are statistically more likely to die sooner. Of course, this may not fully recompense you for the cost of your habit over the years.

 

 

 

 

 

 

 

© AskFinancially.com 2008

Life Insurance

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