Smokers can cut life insurance bill in half by quitting

MALE smokers can cut their life insurance bill in half by kicking the habit and shopping around.

Figures produced yesterday by the Financial Regulator showed the cost of covering mortgage policies varied dramatically across the sector.

In the case of a 29-year-old man protecting a €400,000 mortgage the lowest monthly premium for a non-smoker was €32.15 while the highest offered to a smoker was €70.25 — a potential saving of €457 a year.

The regulator also said by simply shopping around and choosing an appropriate policy a couple can save up to €6,000 throughout a 20-year policy — by switching from individual policies to a joint premium.

The regulator’s head of consumer information, Sharon Donnery, said too many people simply sign up for the insurance policy offered by their mortgage provider and do not look for a cheaper alternative.

“When you apply for a mortgage you may be offered mortgage protection from your mortgage provider, but your lender cannot insist you buy this product from them.

“You are free to shop around, so take a look at the cost comparisons to see if you could get a policy that suits you better,” she said.

In all policies examined by the regulator, customers benefited from taking out the calculator and pricing the various products on the market.

In the case of a middle-aged couple who are both smokers the most expensive policy on the market was 54% dearer than the cheapest alternative.

Spokeswoman for the Irish Insurance Federation, Jennifer Hoban, said it welcomed the regulator’s analysis as a useful tool for customers.

However, she denied there was any discrimination against smokers in the pricing of policies and the more expensive categories reflected the health dangers smoking creates.

“Any difference would be actuarial. There is a provision in the Equal Status Acts which states that where people are treated differently by insurance companies who charge higher premiums this must be calculated using statistical evidence.

“Prices should at all times reflect the experiences of companies and although this survey shows it varies from company to company, it also shows the increased risks associated with smokers.

“If anything it is another reason to quit,” said Ms Hoban.

Across the board premiums for women are cheaper and the differences between smokers and non-smokers are more pronounced among men.

* All price comparisons compiled by the Financial Regulator are available on its website itsyourmoney.ie.