Smoking vs Non-Smoking rates for Insurance.

Here are some interesting facts and dynamics around smokers and insurance. Did you know that around 23% of Australians are currently smokers of one form or another and that if you smoke around a packet of cigarettes a day you’ll spend around $6000 a year on your habit?

Furthermore, despite mortality rates for smokers being a lot higher than for non-smokers, and them making up 23% of the population, smokers account for only around 8% of Life Insurance policy holders, while non-smokers weigh in at a heavy 92%.

What might you glean from this?

Well there’s obviously a fair bit of denial going on out there in the smoking population. Denial of what the habit is actually doing to them, and an inclination to not face up to the insurance they probably need more than anyone.

Firstly, if you’re a smoker, just imagine what sort of life insurance cover that $6000 would buy you. Secondly you need to know that $6000 would buy you up to twice the amount of cover if you become a non-smoker than it would if you remain a smoker.

 “Bad Cop” Fact 1

  • All other things being equal the average 30 year old male non-smoker pays around $550 per annum for a 1M policy. The average smoker pays $950.

Now if you give up smoking it’s a triple whammy of positives I’d say – you’re healthier, you have more money and that money will buy you more – at least in terms of life insurance premiums.

So if you’re reading this and you’re a smoker I know what you’re probably thinking, what do the insurance companies consider giving up smoking?

Well for most on our Rate Detective panel members, like TAL, MLC, AMP, Zurich and AIA that’s going to mean you haven’t had a cigarette for 12 months.

“Good Cop” Fact 1

  • If you’ve given up smoking for more than 12 months remember to let your insurance company know, you may be able to get an adjustment made in your premiums. This usually involves signing a non-smoking declaration.

Now one path you don’t want to go down is fudging on the truth when applying for life insurance if you are a smoker. If you become a smoker after taking out an application, your insurance premiums are not effected generally as insurance companies take your status at the time of application. We have had clients contact an insurance company if they start smoking after they have taken out an insurance application and in some circumstances insurance companies offer a comfort letter that acknowledges your changed smoking status.

“Bad Cop” fact 2

Not disclosing your smoking habit when applying for life insurance is considered insurance fraud. In the event of a claim your policy may become null and void if you are proven to have lied.

Insurance companies may carry out tests, including urine and blood tests to see if you were actually a smoker. They may seek to verify the veracity of any claim by accessing your Medicare records or contacting the GP you had at the time you applied.

“Good Cop” fact 3

A friendly Rate Detective consultant is on hand today to help you with your life insurance needs wherever you are on the smoking spectrum.

Whether you have an existing policy and have given up or started smoking. Or smoke and still want to get the most competitive rate out there, (yes you can still get reasonable cover if you smoke).  Feel free to contact us today to maximise your life insurance needs for your personal life style situation.

Get your quotes now

What to find out more? Enquire now

Published on July 7-th, 2014 in Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

More on this topic

Enquire about Insurance

Important Information

Not all providers in the market are included in the comparison.

Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.