Smokers of a certain age who kick the habit sooner rather than later could see the cost of any mortgage-tied life assurance policy they have fall by tens of thousands of euro, while the savings on serious illness cover are even more substantial, new data suggests.
According to fresh figures from Royal London Ireland, someone who does not smoke or who has successfully given up for an extended period can see the cost of their life assurance fall by as much as 50 per cent when compared with someone who continues to smoke.
The recent cost-analysis from the life assurance and pensions provider found that a 44-year-old person who has stopped smoking for at least 12 months could save €731 on premiums a year for a 25-year €300,000 life insurance policy.
That amounts to savings of €18,279 over the period of the cover.
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If the same individual had specified serious illness cover of €300,000, they could save an even more substantial €2,920 a year on premiums which works out at €72,990 over 25 years.
It is not only smokers who pay a hefty premium for their habit. People who routinely vape are also considered smokers by insurers and end up paying higher premiums as a result.
Just under 10 per cent of Irish adults use e-cigarettes daily, compared with just one in 33 in 2016, with vaping levels highest among younger people. Some 18 per cent of those aged between 15 and 24 say they vape at least occasionally.
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“Quitting smoking not only improves your health but can also significantly cut your life-insurance costs,” said Royal London Ireland’s Barry McCutcheon. “If you’ve been nicotine-free for over a year, contact your insurer to ensure you’re benefiting from lower premiums.
“The sharp rise in e-cigarette use in Ireland, especially among young people, is a growing concern,” he said. He warned that vaping is not risk-free and said it was “vital that people understand the health and financial implications of vaping just as much as tobacco use”.
He noted that vaping is often considered a tool to help quit smoking and the stats show that one in three people have used at least one quitting aid – such as e-cigarettes, nicotine patches, gum, or nicotine pouches – during their most recent attempt to quit smoking.
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“But there is a real danger that e-cigarette users mistakenly believe that their use of e-cigarettes means they won’t be deemed a smoker when seeking or renewing life insurance – and that they’ll avoid higher smoker premiums as a result. This is not the case.”
It is not, of course, the higher cost of life assurance or even serious illness cover that has the most significant impact on smokers’ wallets.
A packet of 20 cigarettes now costs in the region of €19 from legitimate retailers, and a person with a 20-a-day habit will spend a total of €6,935 over the course of a year or just under €175,000 over the 25-year term of the life-assurance policies used by Royal London Ireland.
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“Aside from the evident day-to-day cost savings that can be made from not buying cigarettes or e-cigarettes, those who quit could also save themselves thousands of euros on their life-insurance premiums,” Mr McCutcheon said. “And, of course, quitting brings substantial health benefits – including a longer life expectancy and a reduced risk of heart disease and cancer.”
