Quit smoking to knock thousands off your insurance bills

Smoking ban

Saving money is often one of the first reasons given for quitting smoking. But we usually think only in terms of the money saved on the cigarettes themselves. However, you could also save thousands on your insurance bills by packing them in.

If your New Year's bid to give up smoking ended in failure you may be ready to try again. And with national No Smoking Day just a week away now might be the right time to start preparing for a fresh bid to quit the smokes once and for all.

We all know that smoking is an expensive habit, and the price of a pack of 20 is only likely to go up. However, smoking can cost you in more ways than one. Recent research shows that life insurance can cost up to twice as much for smokers as it is for non smokers.

Any stop smoking guru will tell you that to give yourself the best chance of quitting for good you have to have a genuine list of reasons that make you want to stop. So this time, one more item to add to your list is the money you will save on insurance if you quit.

When it comes to insurance, smokers get hit from all directions. Life insurance, income insurance, health insurance and mortgage protection insurance; they all charge higher premiums for smokers.

This is common knowledge, but recent research from moneysupermarket.com shows just how much more the nicotine habit can add to your insurance bill. According to figures released this week, non-smokers pay about half for life insurance than smokers.

For example, life insurance cover for a 35 year-old man, wanting £100,000 over 25 years would be £17.68 a month with Scottish Provident if he were a smoker. If he were a non-smoker, he would only pay £9.91 a month – a saving of 44 per cent or £2,331 over the term.

“In order to be classed as a 'non-smoker' and qualify for life insurance premium savings, insurers insist smokers have kicked the habit for a full year. The difference in premiums between a smoker and a non-smoker is vast and there are significant additional savings to be made simply by shopping around for the best deal to suit your circumstances,” says Louise Cuming of moneysupermarket.com.

Ms Cuming also added that the price of cigarettes is set to rise further this year.

“Smokers often benefit from a higher income from pension payouts in retirement due to lower life expectancies. However, most people value the health and lifestyle benefits of quitting early and a significant slice off your life insurance premiums could simply be the icing on the cake,” she said.

As mentioned above, smoking doesn't only raise the cost of life insurance, but other types of insurance as well. Another factor to bear in mind is that if you take out a 20 year life insurance or mortgage protection policy as a smoker tomorrow, that is the rate you will pay for the term of the policy. Even if you quit smoking next year, you will not enjoy reduced premiums for your good efforts.

For this reason, now is the time to stop smoking. Once you have gone a year without a cigarette, then you can safely and legitimately enjoy lower premiums on insurance products you take out in the future.

According to the NHS Stop Smoking Service there has been an increase in those who have quit smoking since the smoking ban came into force on July 1, 2007, so it can be done. With No Smoking Day just around the corner, it may be time to start thinking about doing your pocket and your health a very big favour.

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