Smokers in Ireland are now paying almost twice as much for life assurance as non-smokers following legal changes that have equalised the premiums paid by men and women.
But while a study shows that huge savings in premiums can be make by shopping around, the level of cover taken out by most people is not enough, according to industry experts.
The average claim for life insurance last year was just over €71,500, but a number of “super-claims” were paid out last year by Irish Life, according to a study conducted by the National Consumer Agency.
They made payments of over €1m each to the estates of six customers who died last year. The payments included one of €5m — the highest claim paid on a life policy in over seven years.
Irish Life head of claims Martin Duffy says the pay-outs reflect policies from the boom years, but he warned the level of life assurance taken out by most Irish people is still insufficient.
“There is certainly some evidence customers are looking to reduce or stop their premiums, but I would be very nervous about somebody stopping a premium or a plan without seeking financial advice. It’s very important that they talk to their insurer, seek about reducing their premium and thereby level of cover but at least it’s still cover.”
Age, health, occupation, and lifestyle are now bigger factors in the cost of insurance, with smokers paying, on average, 90% more.
The NCA yesterday published its latest life assurance cost comparison survey which reveals potential savings of up to €7,509 on term life assurance and €6,841 on mortgage protection insurance.
Fergal O’Leary, director of research and policy, commented: “Our survey found significant differences across all profiles, so even if you make relatively small savings per month on your policy, these could really add up over 10 to 35 years. For example, a difference in monthly premium of €3.16 for a 27-year-old non-smoker seeking term life insurance cover over 35 years, results in a saving of €1,327 over the policy term.”
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