Many of us enjoy a few drinks at the weekend and this is not necessarily a bad thing if kept in moderation, after all, life can get pretty stressful. What’s more in recent years vaping and e-cigarettes have become increasingly popular as an alternative to traditional smoking.
But how does our smoking and drinking habits impact life insurance and more importantly the cost of our cover?
Life insurance provides a vital financial safety net for our loved ones if we were no longer around to provide. This protection is especially important if you have young children who rely on you financially – the proceeds can clear the mortgage, provide an inheritance, clear any debt and/or meet future living costs.
Below we explore how insurers classify a smoker / high alcohol consumption and how our habits can impact life insurance, potentially helping both your physical and financial wellbeing.
Vapes and e-cigarettes
You may be surprised to learn that if you vape and/or use e-cigarettes or have used within the past 12 months, you will be classified as a smoker by life insurance providers. The same as if you smoke cigarettes.
Irrespective of whether you use nicotine or non-nicotine-based liquids, you will still likely be classed as a smoker and therefore, you must declare your smoking habits during the application process.
Failure to declare your smoking habits to the insurer is known as non-disclosure and could jeopardise a future pay out rendering your selfless investment a complete waste of time and money.
But how will insurers know if you smoke?
Whether you declare yourself as a smoker or a non-smoker, insurers have the right to test your smoking status either via a medical exam or a cotinine test.
Rest assured, if you do require a test, this will be arranged and paid for by the insurer. On rare occasions the insurer may even request access to your medical records to obtain a better understanding of your health, however you must give them prior permission.
Along with your age and medical history your smoking status is one of the most important factors when calculating the cost of cover. Because smoking increases the likelihood of certain medical conditions and therefore the chances of a claim, insurers mitigate this risk by raising (known as loading) premiums.
As we age the rate of loading on a smoker’s premium increases, and so whilst a 30-year-old smoker could pay +20% more for their cover, a 50-year-old smoker is likely to pay double than of a non-smoker. Therefore, if budget allows its usually best to secure cover in early adulthood to lock in the lowest rate for years to come.
As mentioned above you will need to have quit smoking for a minimum of 12 months (depending on the insurer) to be reclassed as a non-smoker.
For more comprehensive information Hampshire based insurance broker Reassured have created this helpful life insurance for smokers guide.
What about our alcoholic consumption?
As part of a standard application process insurers will also ask you to provide information on your weekly alcohol consumption. This is completely normal and nothing to worry about.
High alcohol consumption can have a significant impact on your health. Unfortunately, the misuse of alcohol is the single biggest risk factor for ill health among those aged 15 – 50 in the UK.
It can be hard to discuss our alcohol consumption, especially if it has been high in the past, however it is always important to be open and honest with the insurer. They are not there to judge, and it is important they understand your consumption so they can accurately calculate your monthly premium.
The recommended NHS alcohol consumption is 14 units per week, approximately 6 glasses of wine (175ml) or 6 pints of beer. Insurers use these NHS guidelines when assessing alcohol consumption and therefore anything over 14 units a week on a regular basis could be seen as drinking to excess.
If you have a history of alcohol misuse, it is important to declare this to the insurer. It is then likely that you will need to answer additional questions such how long you have been sober and how long you were living with alcoholism. It does not mean that you cannot secure life insurance cover.
Reducing your alcohol consumption over a sustained period of time will help lower your monthly premium and improve your health – a win-win.
Your weight / BMI
Unfortunately, obesity in the UK has become a one of the major health concerns in recent times, leading to a significant spike in conditions such as type 2 diabetes and health disease.
Insurers will ask about your weight / BMI during the application, with those deemed “overweight” paying more for their cover.
If your BMI is between 18.5 – 24.9 you will be classed as a “heathy weight” and therefore can secure life insurance on standard terms. However, if your BMI is between 30 – 39.9 you would be classed as “obese” and although you will be able to secure cover you will likely have to pay higher premiums. If your BMI is over 45 it is likely your application will be declined by a mainstream provider and you would have to use a specialist impaired insurer, such as The Exeter.
Why not use the motivation of securing a lower life insurance premium to help you lose some weight in 2024?
In conclusion
During the current cost of living crisis many family’s finances are being squeezed, and saving on your life insurance premiums each month could help in a small but significant way. Even a small saving each month over the lifetime of a policy (up to 40 years) could add up to a substantial sum.
Quitting smoking, lowering your alcohol intake, and losing some weight could save you some money whilst more importantly improving your overall health and wellbeing.
So why not seize the day and make a lifestyle change; one which could benefit your bank balance too!
