Consumer Corner: How vaping and social smoking affects your life assurance payments

Smokers will face higher premiums when it comes to life insurance

It’s a common train of thought among ‘casual smokers’ that they are not real smokers. Casual smoking refers to those who have a sneaky cigarette when they have a drink out in a pub or nightclub. However, does it mean a few sneaky cigarettes a year classes them as official smokers? 

In the eyes of society, maybe not but in the eyes of insurance companies perhaps it’s different? The same could be said too for those who vape rather than opting to smoke cigarettes.

It’s no secret that smokers will pay more for life assurance cover. A recent cost analysis from Royal London Ireland shows that there are big differences in what a smoker pays for life assurance against what a non-smoker would pay.

The figures show that a 35-year-old smoker will pay around €44.80 per month for cover while a non-smoker will pay €24.58. Over a 25-year policy, this is savings of more than €6,000. The savings are even bigger when looking at Serious Illness Cover. A 45-year-old smoker will pay around €506.72 per month for cover while a non-smoker will pay around €278.78. Over a 25-year policy this results in savings of more than €68,000 for non-smokers.

Barry McCutcheon, Protection Propositions Lead at Royal London Ireland says that although it’s generally expected that smokers will face higher premiums when it comes to life insurance, the cumulative impact on the overall cost throughout the policy's lifetime is not always fully considered.

“For instance, a smoker turning 45 on their upcoming birthday will pay over €18,000 more than a non-smoker for a €300,000 Level Term Life Cover over a 25-year term. A smoker with a 25-year Specified Serious Illness policy for €300,000, who turns 45 on their next birthday, can expect to pay over €68,000 more than a non-smoker. 

These striking cost savings on life insurance are just another motivating factor for anyone who is planning to give up the expensive habit for good.”

However there’s the ‘grey areas’ of smoking that may not be as clear cut. That’s in relation to vaping and casual smoking.

Paul Walsh of Peopl insurance says that if you vape or are a casual smoker that means, in short, you are classed as a smoker.

He says that most, if not all insurance companies will classify you as a smoker if you vape. He also says that anyone who has a cigarette occasionally with a drink would also be classed as a smoker in the eyes of insurance companies.

“It’s very black and white as far as the insurers are concerned,” he says.

In the event of death, insurers can, and in many cases often do, seek to contact the bereaved person’s GP in the event of a medical query. At the time of applying for insurance, insurers ask for this permission.

“This occurs only if the insurer has cause for query, including if the person’s death may be related to a condition that was not declared on their proposal form or for which they had been receiving treatment. This can include details on whether the bereaved was a smoker,” Mr Walsh says.

The good news for ex-smokers is that you can bring down your life insurance premium if you have been off cigarettes for twelve months.

Mr McCutcheon says ex-smokers can save thousands of euros on their life insurance premiums.

“That’s because if you have life insurance in place and you’ve successfully given up smoking for more than twelve months, it’s now possible to dramatically reduce the cost of your premiums.”

Experts at Royal London Ireland say there are life insurance policyholders, who now fit the criteria of ex-smokers, that are unaware of the potential cost-savings resulting from their change of status.

When it comes to being re-classified as a non-smoker on your life insurance, Royal London Ireland says that a person must have completely abstained from all nicotine and tobacco products in the past twelve months. This abstinence requirement includes the use of e-cigarettes, and vapes, as well as nicotine replacement items such as nicotine patches, lozenges, sprays or chewing gum. 

Also they will generally need to commit to continue to abstain in the future. Mr McCutcheon says that it’s possible that your insurance provider may ask you to complete a smoker test. This is a simple test which involves screening a sample of saliva or urine for tobacco use.

As part of Budget 2024, the cost of a packet of cigarettes rose by 75 cent, bringing the price of a pack of 20 cigarettes up to €16.75.

Mr McCutcheon says that these recent Government measures are having a positive effect on reducing the amount of people in Ireland who smoke. He says that the most recent Healthy Ireland Survey in 2023 found that 18% of the population say they are smokers. This marks a 5% reduction in the number of smokers in the country since the survey was first published back in 2016, in which 23% of people smoked.