Smokers paying twice as much for insurance

SMOKERS are paying up to twice as much as non-smokers for life assurance and compulsory mortgage insurance, new figures show.

Life policies for non-smokers can cost as little as €16 a month, while smokers can pay as much as €31.45 for the same cover.

Smokers can pay as much as €11,322 overall for a standard 30-year policy that will pay out €200,000 if they die within the duration of the scheme.

Non-smokers can get the same deal for half as much at €5,760 in payments over 30 years, while even the most expensive policy would only cost them €6,426 in all.

Yesterday, anti-smoking campaigners ASH said the differences in costs reflected the greater risks of pay-outs on life insurance and mortgage policies taken out by tobacco users.

“Insurance firms know that people who smoke will lose 15 to 20 years of their life and half of smokers will die from smoking,” said ASH chairman Professor Luke Clancy.

He said insurance firms upped the cost of their policies for smokers as they knew they faced a much greater chance of paying out for death or illness.

“When you ask people why they quit they say health but finance is always second,” said the professor.

Mortgage protection insurance — which pays off the loan if the borrower dies — is similarly more expensive for smokers.

For insurance, cover on a 20-year mortgage of €360,000, a woman smoker aged 37 will pay between €35.67 a month and €43.01.

A year’s payments will range from €428.04 for the cheapest policy and €516.12 for the costliest.

Over the 20 years of the mortgage, the insurance cost will total €8,560.80 for the best value policy and €10,322.40 for the most expensive — or enough to buy a small car.

Non-smokers of the same age, however, can pay as little as €20.64 per month, which is 42% less than the smoker.

Over the course of a year, the non-smoker can save €180.36 even on the cheapest policy, equating to €3,607.20 over 20 years.

On the costliest policy on the market, non-smokers can save €136.80 a year or €2,736 over the duration of the mortgage compared to smokers.

The figures were published yesterday by the Financial Regulator to encourage non-smokers and smokers alike to shop around for mortgage insurance and life assurance.

The regulator also published a survey of home insurance policies showing how consumers can save between €100 and €180 by hunting for the best deal.

“When buying and running a home there are so many expenses so it is really important to get the best value financial products,” said the regulator’s head of consumer information Sharon Donnery.

“Most mortgage holders are legally required to take out mortgage insurance, so consumers must make sure that they are not paying more than they need to.”

Costly habit

Smokers pay a high price for their habit:

* Sample cheapest life policy for 26-year-old man for €200,000:

Non-smoker: €16.05 a month.

Smoker: €26.85 a month.

Difference: €10.80 a month or €129.60 a year.

* Sample costliest protection policy for a €360,000 mortgage taken out by a 37-year-old woman:

Non-smoker: €31.61 a month.

Smoker: €43.01 a month.

Difference: €11.40 a month or €136.80 a year.