Life Insurance: Smokers urged to cough up the truth
myfinances.co.uk – April 4, 2008
Life insurance companies are increasingly checking if claimants are truly non-smokers, and turning down claims for those failing to prove they are smoke-free.
Analysis from Onlyinsurance.com shows non-smokers enjoy much lower life insurance premiums – proving a solid incentive for smokers to lie on forms to reduce the cost of cover.
A 25-year female smoker faces life insurance premiums of £11.20 a month, while a non-smoker can pay from £7.50 a month.
Meanwhile a non-smoking 40-year-old male will pay £49.26 per month for critical illness cover (CIC) and a 40-year-old smoking male £93.78.
However, smokers are being warned if they die of a smoking related illness and their insurer thinks they are a non-smoked there will be no pay-out.
Ian Durrell of Onlyinsurance said: “Smokers who declare they have given up but continue to smoke, no matter how infrequently, will be paying for nothing should they die from a smoking related condition.
“The policy simply won’t pay out and their beneficiaries will be the losers.”
To be classed as a non-smoker, for life insurance you need to be fag free for 12 months – over which time you would be £2,016 a year better off through not buying cigarettes.
“Smokers will pay twice the price for critical illness cover than a non-smoker – it’s a no win situation for the smoker, their nicotine addiction is tightening both their heart and purse strings,” concluded Mr Durrell.