Do you need life Insurance? The answer is simple, if anyone would suffer financially if you died, either because of the income that would be lost or because of the extra money that would be needed to pay for the free services you provide, childcare for example, then you need life insurance. The main reason for buying life insurance is to provide financial protection for your dependants in the event of your death.
However, buying a is a pointless exercise if you are not willing to be completely honest with your insurance company. Pretending you don’t smoke or only drink a couple of glasses of wine a week in order to cut your premium is pointless. If you were to die and it was discovered you had been a smoker, it could invalidate your policy and leave your family with nothing. Disclose everything to the insurer, all past medical conditions and any risks. If not they can use ‘non-disclosure’ as an excuse not to pay out.
Being a smoker will not stop you from getting life insurance but it will bump up your insurance premium. If you have smoked cigarettes for a period of time within the last year (even if it’s just in social situations), or have you used other tobacco products, such as cigars or chewing tobacco then you are considered a smoker by life insurance companies. Your insurance premium is calculated based on the amount and the type of nicotine you use, and the period of time you’ve used it. If you’ve smoked before, and stopped smoking recently, or haven’t smoked for a long period of time, this can also factor in to calculating your rate. In simplest terms, the way the insurance company view it is if you smoke (even if only a few times a year), you are increasing the risk of health issues and sickness and in turn, will increase the risk of death.
Making lifestyle changes such as giving up smoking can reduce your premiums. However, most insurers will require a level of commitment before they will adjust premiums accordingly.
In order to be classed as a non-smoker and therefore qualify for life insurance premium savings, insurers insist on ex-smokers to have given up for a full year. Therefore, a person who has given up smoking on April 2nd 2009 would officially be classed as non-smoker on April 2nd, 2010. The savings that could be achieved by making this change could be around £227 on critical illness cover or £58 on a single life insurance policy. Add on top of this the additional savings you’ll make from no longer buying cigarettes and you have something to smile about.
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