Ex-smokers can save on life insurance premiums

According to Gavin Came, chairman of the financial planning committee at the Financial Intermediaries Association of Southern Africa (FIA), a smoker is likely to pay a higher cost than a non-smoker due to the associated health risks. "The actual premium a smoker would be required to pay is dependent on a number of factors, including the number of cigarettes they smoke each day. On average, however, a smoker is likely to pay between 25% and 120% more for life insurance than a non-smoker," Came says.

Evaluate lifestyle changes

"Smokers pay a far higher price for their life cover, as well as other ancillary benefits. In the current environment, with costs such as electricity, fuel and food constantly increasing, it is vital that former smokers take the time to advise their broker or life insurer of a change in their circumstances as it could make a significant impact on their finances."

Came says it is also important for consumers to evaluate other changes they may have made to their lifestyle such as regular exercise as this can have a positive impact on the cost of financial services products. Consumers who make an active decision to lead a healthier lifestyle should speak to their financial adviser to determine exactly how this can benefit them financially.

Came warns, however, that while companies are likely to reduce the cost of premiums for clients who have quit smoking it is essential that they do not lie to their insurer to receive preferential rates. He says it is also important for consumers to remember that if they start smoking again after informing their insurer otherwise, they must update their details to ensure that in no way the insurer would be able to repudiate a potential claim based on non-disclosure.