Smoking and Life Insurance

If you’re a smoker you can potentially save thousands on your life insurance premiums as well as gain significant health benefits by quitting smoking.

We can help you review your policy if you’ve quit smoking for more than 12 months. However, if you have no desire to quit we can also assist you in finding coverage that’s affordable, by comparing some of the leading insurers in Australia.

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Insurance definition of smokers – who is classified as being a smoker?

Many insurance companies will classify you as a smoker if you:

  • Have smoked 1 or more cigarettes in the past 12 months.
  • Are taking nicotine replacement products such as Champix, Nicabate (including patches and gum) within 12 months of quitting smoking.
  • Smoke e-cigarettes

Smokers life insurance rates

People who smoke may pay 50-100% more for their life insurance premiums compared to non-smokers.

Life insurance premiums for smokers vs non-smokers

Smoking StatusAgeType of CoverLevel of CoverCost per month
Non-Smoker30Life Insurance$1 million$36.58
Smoker30Life Insurance$1 million$73.28

Income protection premiums for smokers vs non-smokers

Smoking StatusAgeType of CoverLevel of CoverCost per month
Non-Smoker30Income Protection$6,250/month$36.82
Smoker30Income Protection$6,250/month$44.12

Trauma cover for smokers vs non-smokers

Smoking StatusAgeType of CoverLevel of CoverCost per month
Non-Smoker30Trauma Insurance$250,000$35.31
Smoker30Trauma Insurance$250,000$65.82

TPD insurance premiums for smokers vs non-smokers

Smoking StatusAgeType of CoverLevel of CoverCost per month
Non-Smoker30TPD - Any Occupation$1 million$33.50
Smoker30TPD - Any Occupation$1 million$48.32

The above quotes were calculated on a Male, aged 30, living in NSW and working as an Accountant (October 2018)

How you can reduce the cost of your cover

If you are a smoker, there may be a number of things you can do to help make your insurance more affordable:

  • Quit smoking for 12 months and be off nicotine replacement products
  • Select group policies purchased through super might provide standard rates
  • Change your premium style
  • Reduce your level of cover
  • Take out a combined policy
  • For income protection, reduce your benefit period and increase your waiting period
  • Remove automatic CPI increases
  • If on stepped premiums you can elect to freeze your premiums
  • Remove any unnecessary policy options

How do insurers assess smoking?

Generally, if you have smoked a cigarette in the past 12 months, or used any other nicotine products, you will be classified as a smoker and smoker rates will apply. It will usually come down to regularity and whether there is a pattern or consistency of smoking, for example, once a week or once a month, you will generally be classified as a smoker.

By smoking, you are consuming dangerous toxins and thus increasing your risk of developing a critical illness and shortening your lifespan. However, smoker rates will typically be assessed on a case by case basis because each company has their own underwriting guidelines.

E-cigarettes:

If you smoke e-cigarettes or ‘vape’ you’ll still generally be classified as a smoker. Insurance companies usually view e-cigarettes as similar to regular cigarettes and your chances of picking up smoking again are increased.

Cigars:

You may be able to smoke 1 cigar per year (beware, this might not apply to all insurers) without incurring smoker’s rates. This is because cigars are viewed as ‘celebratory’ occurrences and not regular occurrences. However please note this will be assessed on a case by case basis.

Nicotine replacement products (NRP):

Nicotine replacement products including patches, gum, lozenges, inhalators and mouth spray, are designed to provide you with your nicotine cravings (the addictive substance in cigarettes) without the harmful chemicals found in tobacco products. Any use of nicotine replacement products will usually result in a classification of a smoker until you have been off the NRP for at least 12 months. This is because there is a higher likelihood that you will go back to smoking if you are still using these products.

Why does smoking affect the cost of insurance?

Smoking affects the cost of insurance due to the increased health risks associated with smoking. Life insurance companies need to take any and all risk into account when calculating premium costs and deciding whether to offer someone cover. Essentially, if you smoke, you have an increased risk of developing a serious illness which could result in you being unable to work, as well as increases your risk of dying.

Nicotine

Nicotine is the substance in cigarettes which causes addiction. It releases dopamine and can cause changes to the structure of the brain as well as raising heart rate, blood pressure, releasing hormones that affect the central nervous system and constricting blood vessels. It is also believed to cause gastrointestinal disorders, issues with pregnancy and may be linked to the development of cancer.

Together, these substances pose a significant risk to smokers and non-smokers alike through second hand smoke, putting smokers at an increased risk of developing a number of serious illnesses and diseases:

  • Cancer including lung, tongue, lungs, mouth, nose, throat, oesophagus, pancreas, kidney, liver, bladder, bowel, ovary, cervix, bone marrow, and stomach.
  • Lung disease such as emphysema and chronic bronchitis

Health risks of smoking

According to the Quit website, cigarettes contain over 4000 chemicals which can be a danger to your health. Tar is generated from burning tobacco and is a part of cigarette smoke. It contains a number of substances, including nitrogen, oxygen, hydrogen, carbon dioxide, carbon monoxide as well as a number of organic substances. Tar is the main cause of lung and throat cancer in smokers.

Carbon Monoxide

Carbon monoxide replaces oxygen in the blood and can be fatal in large doses. Higher amounts of carbon monoxide in the blood means that less oxygen reaches the brain, heart, muscles and other organs.

Hydrogen Cyanide

Hydrogen Cyanide prevents the lungs from clearing foreign substances out, allowing poisonous substances to build up in the lungs.

Eye Problem

Macular degeneration: Smoking can cause damage to the rear of the eye, a condition known as macular degeneration which can lead to vision loss and blindness. Smokers are four times more likely to develop age related macular degeneration and can develop it up to 10 times earlier than non-smokers.

Heart Diseases

Stroke: Smoking can narrow the arteries to your brain which can lead to a blockage and a stroke. A stroke can cause paralysis, difficulty speaking and death.

Heart: Smoking narrows the blood vessels which can cause blocked arteries leading to a heart attack, stroke, peripheral vascular disease and more.

Cancer

Cancer: Smoking has been known to cause lung, tongue, mouth, nose, throat, oesophagus, pancreas, kidney, liver, bladder, bowel, ovary, cervix, bone marrow, and stomach cancer.

Lung diseases including lung cancer was the 4th[3] leading cause of death in 2012, accounting for over 8,000 deaths in Australia. Colon, sigmoid, rectal, prostate, blood and lymph cancers, prostate cancer, breast cancer, pancreatic cancer and skin cancer all feature in the top 20 leading causes of death.

Lung Diseases

Lung Cancer: 9 out of 10 lung cancers are believed to be caused by smoking

Emphysema: Smoking can cause damage to the sacs in the lungs, which can lead to emphysema, a condition marked by a shortness of breath and difficulty breathing. A smoker is five times more likely to develop emphysema compared to a non-smoker.

Benefits of quitting smoking

Generally your smoking status may be reviewable up to 12 months after you have quit smoking. This means you may be able to go back to standard rates and benefit from more affordable premiums. However, please note if you have quit due to medical advice you may not be eligible for standard rates. Other health benefits of quitting smoking include:

  • Reduces your risk of lung cancer
  • Reduces your risk of stroke
  • Reduces your risk of heart attack
  • Slower hear rate and reduced blood pressure
  • Oxygen can more easily reach your heart and muscles
  • Improvements in sense of taste and smell
  • Less coughing and wheezing
  • Improved immune system increases your chance of fighting off infections
  • Reduces the risk of cervical cancer in women

How we can help

We compare some of the leading life insurance companies in Australia and work very closely with them to find our clients affordable cover. Our dedicated staff and expert advisers will help guide you through the comparison process, providing you with quotes from each of the insurers we compare. We will then work closely with you throughout the application and underwriting process so your cover can be put in place as quickly and easily as possible.

Published: October 22, 2018
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