You may have reached an age or an important milestone in your life, where taking out a life insurance policy has become high priority to you. Great, you’re taking the first step towards protection for your family and peace of mind for yourself.
When we are in our late teens and early twenties we like to think that we are infallible and that there is tonnes of time to think about protecting the likes of debts and mortgages or leaving a lump sum to your family and/or loved ones. But, before we know it, we’ve got a mortgage, 2.4 kids, two cars on finance and credit card debts up to the roof! Sound familiar???
Let’s press pause a moment and take a breath… where are you really? Apart from potential suburban hell, you’re also in a position of enormous responsibility! Let’s drill down and see what we’re talking about…
- Interest only mortgage of £225,000 for the next 21 years with monthly payments of £925
- Two cars £28,000 on finance for the next 3.5 years with combined monthly payments of £800
- Credit card debts to the tune of around £14,000 which you pay around £300 per month on
- Outstanding loan amount of £5600 from 3 years ago which you pay £240 per month on
All of that before you even pay monthly bills and costs etc. Wow! It’s truly scary yeah?
Luckily, your spouse has a good job and you have a fantastic one, with a combined income of around £89,000 per annum. You bring home just over £6,000 pcm between you, so those monthly credit payments of £2265 are more than manageable and even with another £2400 pcm for general bills and living costs etc, you’re doing well.
Time for a spanner in the works – you’re at work, feel some tightness and pain in your chest, start to panic and call for help, but it’s too late. You’ve had a massive, unexpected heart attack and passed away leaving the spouse, two kids, a dog and huge debts. If only you’d had a life insurance policy, but you didn’t take one out as you are a smoker. When you got quotations they were between 30%-50% higher than a non-smokers policy. There was no way you were falling for that con. You’d be fine.
The reality of this situation is that your spouse who only earns £35,000 per year is not going to be able to pay that mortgage on her own, never mind the two cars on finance, the loan and credit cards. Ravaged with grief and sick with worry, she starts to miss payments on the debts and before we know it, she’s in court, the house and cars are being re-possessed, and she’s sofa surfing with the two kids waiting for the local authority to re-house them. There is your lesson on why it’s vital to have life insurance.
Here’s your lesson on why it’s essential you are honest about your smoker status when applying for life insurance. If you think you can beat the system and claim to be a non-smoker when you do in fact smoke, then you need to think again. If you suddenly pass away from what is deemed a smokers disease your medical history will be closely examined and a post mortem may even be requested. If you are found to have falsified your status as a non-smoker one of two things could happen.
The first is that your family would receive no pay out at all and the second option is that the insurer may offer them a reduced pay out to account for the difference in premiums you should have paid of maybe 30% – 50% less. You might think that a cheeky cigarette on a Saturday night or a cigar on a special occasion doesn’t make you a ‘proper’ smoker, so the higher smokers’ premiums wouldn’t apply to you. But the fact is, insurers don’t distinguish between occasional and regular smokers.
E-cigarettes have grown massively in recent years. According to Action on Smoking and Health (ASH, 2.8 million adults in Great Britain are currently using e-cigarettes). E-cigarettes are thought to have less health risks than standard cigarettes and many smokers are making the transition. However it’s still early days and at this point in time, insurers still consider you a smoker if you use e-cigarettes.
What if I quit smoking?
Kicking the habit can only be good for you and your pocket. Life insurance providers consider you a non-smoker once you’ve not used nicotine products for 12 months or more, so it makes sense to quit sooner rather than later.
Once you’ve not smoked for 12 months, it’s worth contacting your life insurance provider to see if they are able to reduce your life insurance premiums.
Click this link for advice and tips on how to kick the habit;
https://www.nhs.uk/live-well/quit-smoking/10-self-help-tips-to-stop-smoking/
Speak to our fully trained team of advisors who will be able to advise you on the best and most cost effective solution to your smoker life insurance requirements.