Ex-smokers missing out on cheaper life insurance3.3 million missing out on savings of £316m

25 January 2011

Life insurance family

Life insurance is an important financial product for those with dependents

Around 3.3 million ex-smokers in the UK are collectively paying £316m more per year for life insurance premiums than they need to, according to research from Sainsbury’s Finance.

The firm, which provides life insurance policies, says many people are paying over the odds for life cover because they have failed to inform their insurers that they have given up smoking.

Anyone who has kicked the habit – perhaps thanks to a 2010 New Year’s resolution - could save up to 46% on their life insurance premiums, Sainsbury’s claims. 

Life insurance and giving up smoking

Life insurance companies have criteria that they will apply to individuals in order to ascertain whether they can be classified as non-smokers.

In order to qualify as a non-smoker, you usually have to have given up smoking at least 12 months ago – and you shouldn’t have used any nicotine replacement products during that time either.

According to Sainsbury’s Finance, the average smoker’s yearly life insurance premium is £209.75, compared with £111.88 for a non-smoker’s. Therefore, it’s possible you could save as much as £95 on life cover annually if you’ve successfully stopped smoking within the past year or so.

Andrew Gray, Sainsbury’s life insurance product manager, said: ‘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, although the financial gains are often underestimated.’

Finding cheaper life insurance

If you’re an ex-smoker it could pay to find out whether you’re eligible for a cheaper life insurance policy by speaking to your current provider.

However, depending on your age and circumstances, it’s possible you could save more money by switching insurance providers altogether.

‘Before you consider changing your life insurance provider, though,’ says Which? Money editor James Daley, ‘You should ensure you’ll be getting the same standard of cover at the cheaper price.

Also, if it’s a long time since you first took out your existing life insurance policy, it’s possible your age will count against you when a new insurance company calculates the price of your premium – so whether you can save money by switching will very much depend on your particular situation.’

For tips on what kind of life insurance policy might be right for you, as well as information on which life insurance providers our experts rate, read the Which? guide How to buy life insurance.

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.