Smokers are being charged as much as double the premium of non-smokers for life insurance, a new survey has found.
The National Consumer Agency says that smokers who kick the habit stand to save €13,000 over the life of a policy.
The agency is trying to highlight choices consumers have when it comes to life insurance, something that is obligatory in most mortgages as well as desirable for those with dependents.
The cost comparison also highlights that consumers can make significant savings by switching provider.
“If giving up smoking is your New Year resolution in 2011, bear in mind that as well as the immediate savings you’ll make, you could also cut thousands off the long-term cost of your life insurance policy, once you’ve been a non-smoker for 12 months," said Karen O'Leary, director of public awareness and Financial Education at the NCA.
Smokers may have to wait for 12 months after they give up to benefit from cheaper insurance, depending on the provider but the savings are substantial.
For example, a 30-year-old man with a €320,000 term life policy would reduce his premium with his current provider by as much as €32 a month if he gave up smoking. If he then switched to another provider he could cut his premium by a further €5 a month. This is a total saving of more than €13,000 over the 30-year term.
They should also contact their insurer to notify them and ask for a review of their premium.
The NCA's latest price comparison area for life insurance shows that there are also significant benefits for non-smokers who shop around.
A couple, both 40-years old and non-smokers, each with an individual €210,000 term life policy, could save €82.80 annually, by switching to a dual policy with their current provider. This seems like a small saving, but adds up to more than €1,200 over the term of a 15-year policy. If they switched to a dual policy with another provider they could save as much as €140 a year (€1,680 over 15 years).
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