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The risks of smoking are well known, but beyond the cost of the packets themselves the habit could be costing a lot more. Each Budget brings more tax hikes on the cost of smoking, but smoking also makes life insurance more expensive. Currently life insurance is very competitive, especially as people are compare quotes on online, but for smokers they can be almost double the cost. The simple fact is that smoking makes a payout more likely as you are more likely to die. Smokers are likely to miss out on life insurance deals because they represent a high risk to insurers. "If a smoker had given up on July 1st 2007, they would have been officially classed a non-smoker on July 1st 2008 - therefore over the past year they could have saved £227 on critical illness cover, or £58 on single life cover," said Emma Walker, head of protection at moneysupermarket.com. For a male smoker with a 20-a-day habit, the cost of cigarettes (on average £5.60 a pack) plus the added costs of life cover compared to a non-smoker over 25 years, adds up to a staggering £53,020 cost of smoking. "Smokers have to pay more for life insurance and critical illness cover because smoking is a serious risk to your health and a major cause of coronary heart disease and lung cancer," explained Joe Wiggins, from Legal & General. Quitting now will give health benefits straight away and clearly save you money on the cost of packs. However, insurers only consider you to be a non-smoker once you can say you have not touched a cigarette, or nicotine, in a year. Critical illness cover (CIC) premiums are also affected lifestyle. A non-smoking 40-year-old male will pay around £49.26 per month for CIC and a 40-year-old smoking male £93.78. The smoker is hit by £44.52 extra per month to their CIC – that's an additional £534.24 just for smoking and a total of £1125.36 for annual CIC. Ian Durell, at Onlyinsurance, said: "Smokers will pay twice the price for CIC cover than a non-smoker – it's a no-win situation for the smoker, their nicotine addiction is tightening both their heart and purse strings." Honesty is the best policy High insurance costs for smokers makes lying on applications seem tempting. But life insurance companies are on the lookout for smokers who fib on their application forms. "We've found that one in ten people (eight per cent) hide the fact that they smoke – either because they aim to give up soon or because they consider themselves a 'social' smoker rather than a 'real' smoker," Mr Wiggins said. And if a smoker lied on their application? "It would depend on the case, but they may face a reduced payout or even have their claim declined altogether," Mr Wiggins warned. It is quite simple for an insurer to check whether you are a smoker. You may be asked to provide a saliva sample, for example. Or an insurer could check your medical notes, if a claim was made. "Smokers who declare they have given up but continue to smoke, no matter how infrequently, will be paying for nothing should they die from a smoking related condition," said Mr Durrell. "The policy simply won't pay out and their beneficiaries will be the losers." Norwich Union warns that it would treat lying about smoking on your insurance application as it would any other non-disclosure – so invalidating the policy. Even if you die of a non-smoking related cause, your beneficiaries may still end up with nothing if the claim is investigated. Of course, this only applies to smokers who lie at the time of their application. Provided you have not touched cigarettes for twelve months when you apply for a policy, you are free to take up smoking again the next day and still pay non-smoker rates. Take action now Obviously, the best thing you can do for your wallet (and your health) is to give up smoking – and to tell your life insurance company in a year's time. There are other actions you can take to reduce your premiums – such as shopping around to find the best deal, as quotes can vary between insurers. "Staying fit and healthy would also help – those with a high BMI may also find that they have to pay more than average," Mr Wiggins advised. Another important thing to think about is your health at the time of your application, Mr Durell added. "There are some things you cannot avoid, like your family medical history," he said. "But if you get your life cover sorted out early, you will be on a lower premium, because the older you get the greater the risk of developing health problems."
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