Ex-smokers missing out on lower life insurance premiums
Around 3.3 million ex-smokers in the UK are collectively paying £316 million more a year on life insurance premiums than they need to because they haven't informed their policy provider they have quit, according to new research by Sainsbury's Life Insurance. The supermarket bank, which offers life cover from as little as £5 a month, is urging life insurance policy holders to inform their provider if they have kicked the habit, as they could save an average of 46% on their premiums.
The findings reveal that around 6.5 million life insurance policy holders gave up smoking more than 12 months ago and haven't used nicotine replacement products in the past year, therefore could be eligible to be classified as non-smokers by a life insurance provider. However, shockingly more than half of these people (51%) haven't informed their provider.
Research commissioned by Sainsbury's Life Insurance across a range of different profiles reveals that the average smoker's annual life insurance premium is £209.76 compared with £113.88 for non-smoker's, a difference of £95.88. This means that collectively, these people could be paying £316 million a year more than they need to in life insurance premiums.
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, but the financial gains are often underestimated. 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.
"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. 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."
The findings reveal that 2% of all adults, around 1.1 million people, intended to quit smoking as a New Year's resolution this year, and a further 5%, around 2.3 million people, intend to give up a later stage in 2011.
Over 1.6 million people say they have quit smoking in the past year, with over a million of these saying they haven't used nicotine replacement products in the past 12 months and the remainder having relied on them to some extent.
Sainsbury's Finance is urging people to be aware of the benefits of having life insurance and if they don't have a policy, to start considering what level of cover they should invest in to ensure peace of mind that their loved ones are financially secure, should the unthinkable happen.
Andrew said: "Life insurance is one of the most important financial products you can buy, and it's crucial that you have adequate cover to suit your individual circumstances, especially if you have dependants. People should ideally review their premiums regularly like they might their motor or home insurance, particularly if their circumstances change."
Life insurance premiums, through Sainsbury's Finance, which start from as little as £5 a month (which is 16p per day), are among the most competitive available and regularly appear in best-buy tables.
For further information, visit sainsburysfinance.co.uk.