Guiding consumers since 2009

Ex smokers pay up to 120 per cent more for life cover

By Staff Writer

Ex smokers may be unaware of the fact that they may be overpaying for their life insurance if they have quit for over a year but have not informed their insurance provider.  According to Gavin Came, chairman of the financial planning committee at the Financial Intermediaries Association of Southern Africa (FIA), if someone has stopped both smoking and using nicotine-replacement products for over 12 months, they should qualify for a reduction in the cost of their life insurance.

 

A UK study conducted by MoneySupermarket.com found that the typical 30 year old male smoker with £100 000 (R1.2 million) of cover would pay approximately £4,209 (R54, 235.85) - or £14 (R180) a month - more in premiums over a standard 25 year life policy. In addition to this, 37% of former smokers in the UK believe that the smoking ban helped them to quit, according to research conducted by Pfizer.

 

Came said smokers in South Africa are also likely to pay a higher cost than a non-smoker due to the associated health risks. “The actual premium a smoker would be required to pay is dependent on a number of factors, including the number of cigarettes they smoke each day. On average, however, a smoker is likely to pay between 25% and 120% more for life insurance than a non-smoker.”

 

“Smokers pay a far higher price for their life cover, as well as other ancillary benefits. In the current environment, with costs such as electricity, fuel and food constantly increasing, it is vital that former smokers take the time to advise their broker or life insurer of a change in their circumstances as it could make a significant impact on their finances.”

 

Consumers should also inform their insurer about other changes they may have made to their lifestyle such as regular exercise as this can have a positive impact on the cost of financial services products. “Consumers who make an active decision to lead a healthier lifestyle should speak to their financial adviser to determine exactly how this can benefit them financially. For example, a heavy drinker will also likely pay higher premiums due to the health risks this would pose. However, if they have stopped drinking for a sustained period of time they should be able to review any loadings or exclusions.”

 

Updating details regularly will help to ensure that potential claims can’t be repudiated by insurers based on non-disclosure advised Came. He warned that while companies are likely to reduce the cost of premiums for clients who have quit smoking it is essential that they do not lie to their insurer to receive preferential rates. Clients must also inform insurers if they have not kicked the habit and started smoking again after informing their insurer otherwise.


 

Recent Articles

Featured Are you entitled to your spouse’s pension after divorce?

Divorce means more than just parting ways with your partner. It may also involve parting ways with your assets. The Divorce Act states that your retirement fund forms part of your assets. This means that it will be considered when dividing up your assets.

Retrenched – what payments are you entitled to?

In the current struggling economic climate, retrenchments are a regular occurrence and not everyone survives the cut. If you find yourself on the receiving end of retrenchment you may have questions about the payments that are due to you.

Do you want to settle your debt?

You may be considering settling your credit account, whether it’s a credit card or various store accounts, now may be as good a time as any. This especially if you have saved, or you received a tax return or salary bonus. 

Can you afford a personal loan?

Taking out new debt is not always a choice. However, if you’re not pressed by a medical emergency or an unforeseen disaster, it’s worthwhile considering whether you can actually afford it. But what does it mean to “be able to afford a personal loan”? What percentage of your income should you not exceed dedicating to it? 

Deals

Builders Black Friday Special

Price: R5000
When: Until 29 November 2019
Where: Online

Café Rousse Monday Special

Price: Available on request
When: Mondays
Where: Nationwide

Skye Bar Mojito Special

Price: R55
When: Until 31 December 2019
Where: Johannesburg