Smokers paying €18,000 more for life assurance

SMOKERS are paying up to €18,000 more for life assurance than non-smokers, with their premiums up to 150% higher.

New figures from the Financial Regulator show that smokers generally pay double for assurance policies, which pay a lump sum in the event of the holder’s death.

By shopping around, meanwhile, smokers and non-smokers alike can save as much as €4,500 on the total cost of life assurance.

Figures released yesterday show that a 38-year-old male non-smoker can pay as little as €42.60 per month for a 25-year policy with a €300,000 pay-out, while a smoker pays 102.63 for the same policy.

The total cost of the non-smoker’s policy is €12,780, over 25 years, while the smoker pays €30,789 — or €18,009 more — for the same assurance.

Similarly, the monthly premium for a 38-year-old, non-smoking woman could be as low as €32.30, while a smoker the same age paid €70.18 for her policy.

The non-smoking woman pays €9,690 over 25 years for her policy, while the smoker pays €21,051, or €11,361 extra.

Females pay less than men for life assurance because they generally live longer.

The regulator found a similar pattern on mortgage life protection cover policies, which pay off a home loan if the borrower dies.

Smokers in their 20s paid just under double the normal rate, while smokers in their late 30s could expect to pay around 120% extra, and, in their late 40s, 140% more than non-smokers.

“Premiums for smokers are much higher than non-smokers due to earlier death among smokers,” said Mary O’Dea, the regulator’s consumer director.

Smokers who give up, she added, can find their premiums drop — after one or two years — as they switch to non-smoker rates.

Ms O’Dea stressed, however, that both smokers and non-smokers would do well to shop around for cheaper policies.

The life assurance premium for a 26-year-old female non-smoker can be as low as €12.41 with Eagle Star, for instance, but as high as 20 with Irish Life — a difference of €2,732.40 over the lifetime of a 30-year policy.

If the same female were a smoker, she could make commensurate savings by shopping around, paying as little as €18.27 with Eagle Star or as much as €25.66 with Irish Life — a difference of €2,660 over the duration of the policy.

Premiums rise if holders take out life assurance or mortgage policies later in life, but significant savings can still be made.

A 25-year policy for a male smoker in his late 30s can cost €102.63 per month with Irish Life, but as little as €87.41 with Ark Life — a difference of €4,566 over the lifetime of the policy.

The cost comparison survey is available from www.itsyourmoney.ie or by calling 1890-777777.