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Up in smoke! Millions of 'quiet quitters' could be paying too much for life insurance
Giving up smoking is a fantastic achievement - so once you’ve succeeded you tell everyone, right?
Well, not necessarily. New analysis from Sainsbury's Life Insurance suggests that millions of UK policy holders have successfully quit without considering what this means for their life insurance policy - and are missing out on the full financial benefits because of it.
The analysis suggests that some 6.5 million UK life insurance policy holders may have given up smoking more than 12 months ago, and not used nicotine replacement products in the last year.
People in this group could be eligible to be classed as 'non-smokers' for their life insurance. And yet some 51% of them - 3.3 million people - could find themselves missing out on lower premiums simply because they haven’t informed their insurer that they've kicked the habit. Of course, premiums are affected by factors other than smoking, and
therefore not all individuals with existing policies will benefit from switching.
therefore not all individuals with existing policies will benefit from switching.
"A huge number of people have quit smoking over the past few years and the health benefits of not smoking are now very well-known, but the financial gains are often underestimated,” commented Lucy Hunter, Sainsbury's Life Insurance Manager.
"Apart from the obvious savings you can make from not buying cigarettes, your life insurance premium could decrease as you are demonstrating that you've made efforts towards living a healthier lifestyle," she added.
The analysis suggests that these 'quiet quitters' could between them be paying £316 million more in premiums than they need to each year.
With the market's average smoker's annual premium costing £209.76, compared to £113.88 for a non-smoker, Sainsbury's Life Insurance warns that ex-smokers could each be missing out to the tune of £95.88 on average – a 46% saving on their annual premium.
Added incentive?
Of course, this means there are savings for potentially millions of policy holders who have already kicked the habit. However, the news could also come as extra motivation for the huge numbers of smokers who are currently attempting to quit.
The research showed that as many as 1.1 million UK adults – around 2% of the adult population - made giving up smoking a New Year's resolution for 2011, with another 2.3 million intending to quit later in the year.
"If you gave up smoking more than 12 months ago and haven't used any nicotine replacement products in that time, you could qualify as a non-smoker," advises Lucy Hunter. "Therefore, now is the time to notify your life insurance provider, or if you don't have a policy, it's a good time to shop around for one, and make sure you declare how long you have given up smoking for when you're applying for a policy - whether it's your first ever policy or if you're simply switching providers."
This information does not constitute financial or other professional advice. You should consult your professional adviser if you require financial advice Customers must ensure the plan is suitable for their needs.
Published: 07/04/2011
The information in this article was correct at the time of publication and contains time sensitive data and links, it may not be accurate at the time of reading.