How does smoking affect life insurance premiums?

Smoking doesn't just hurt your health, but can have a big impact your wallet, too 

2 minutes

In light of the laws on cigarette packaging that were enforced recently, we asked an LV= expert how smoking is harmful to your health and how it affects life insurance premiums.

  • Will the new packaging laws reduce the number of smokers?
  • The use of any tobacco product can affect life insurance premiums.
  • Injury prevention and stress management is as important as feeling the burn.

What are the new tobacco packaging guidelines?

Announced in May 2016, the Department of Health’s (DH) new tobacco packaging guidelines gave the tobacco industry 12 months to align their products with the following regulations:

  • The health warning must be:
  1. in English
  2. fully visible
  3. permanent
  4. surrounded by a 1mm black border
  • All cigarette packs must be the standardised shape and colour, described by the DH as ‘a non-shiny drab dark brown’.
  • They must also have specified picture and text health warnings that cover 65% of the front and back, with no promotional images or logos.
  • Cigarette packs must contain a minimum of 20 cigarettes, while tobacco packages must contain a minimum of 30g of tobacco.
  • The regulations also cover the size of e-cigarette tanks, chewing tobacco packaging and cigars. Menthol cigarettes, meanwhile, will be banned completely in 2020.

What is the aim of the new packaging laws?

The government, specifically the DH, is hoping that the new regulations will reduce the number of UK smokers.

According to a review by Cochrane UK (@CochraneUK) of 51 studies into how similar regulations have reduced smoking in other countries, there could be 0.5% drop in the number of smokers due to the new packaging laws by next year.

The ONS found that, in 2016, 15.8% of the UK adult population smoked, which equates to around 7.6 million people. A 0.5% drop, then, could see about 38,000 people quitting.

‘Evaluating the impact of standardised packaging on smoking behaviour is difficult to do but the evidence available to us, whilst limited at this time, indicates  that standardised packaging may reduce smoking prevalence,’ said Professor Ann Mc Neill, from King’s College London, lead author of this Cochrane review and Deputy Director of the UK Centre for Tobacco and Alcohol Studies.

However, according to a tobacco industry whistleblower, ‘nobody really expects it to work’. In fact, a report from the Tobacco Manufacturers’ Association claimed that, ‘abolishing small packs is counterproductive for those who want to give up smoking’.

What are the health risks of smoking?

‘The possibility of getting lung cancer, heart disease, respiratory problems and other illnesses is increased by smoking,’ explains a spokesperson at LV=.

According to a number of studies, many of which are cited on the Cancer Research UK website, tobacco use is the biggest avoidable cause of cancer. The World Health Organisation, meanwhile, lists heart disease and stroke as potential consequences of smoking.

If you already have a health problem, smoking can make it worse.

‘The risk of smoking is increased further when combined with other medical conditions, like cardiovascular problems, such as high blood pressure or high cholesterol, heart disease or respiratory conditions,’ LV= adds.

Smoking not only damages your health  - it can increase your life insurance premium too

Why does smoking increase protection insurance premiums – including life, critical illness and income protection?

‘Smoking is considered a risk factor for protection policies as smokers have a higher risk of life-threatening diseases than non-smokers,’ explains LV=.

They also have a higher risk of illness and therefore a higher risk of being unable to work, which is important when considering critical illness cover and income protection.

‘A combination of smoking and a health condition – such as high blood pressure, high cholesterol or a respiratory condition – are likely to result in increased premiums,’ says LV=. ‘The higher premiums enable us to offer cover to a customer even though there is a heightened risk of claiming. If they were to become ill because of smoking, they would be covered at a time when they need it the most.’

Your application for insurance might also be rejected if you have a health condition and you smoke.

‘For cases of heart disease, life insurance policies will often be declined if the applicant is also a smoker. The premiums will be increased by 25-50% for cases of mild asthma where the applicant is also a smoker,’ LV= explains.

Does it matter how much I smoke?

‘The possibility of health problems associated with smoking is not dependent on whether you smoke 1 a day or 20 a day,’ says LV=, ‘which is reflected in the claims experience we see for the majority of protection products, hence we vary our price dependent on whether or not a policyholder smokes.

‘We class a smoker as a person who has smoked, used any tobacco products, or used any tobacco replacement products such as e-cigarettes or nicotine patches within the last 12 months,’ LV= continues.

Will my insurance be reduced if I stop smoking?

If you stop smoking, your insurer may consider the amount you are paying on your premiums.

‘It is important to remember that we can always look to review the premiums a customer may pay if they have stopped smoking for at least a year,’ says LV=.

If you’re looking to quit smoking, whether for Stoptober, as a New Year’s Resolution, or otherwise, the NHS has a free support service for people looking to break the habit.