Kicking the habit could have saved you £8,500 since the smoking ban

Published:

22/06/2009

Topic:

Press Release,Insurance,Life

Two years on from the introduction of the smoking ban in England, smoke-free Brits could be £8,500 better off by stubbing out cigarettes for good, according to moneysupermarket.com.²

• Smoke-free Brits could save £5,670 on critical illness cover premiums, says moneysupermarket.com¹ 
• £2,740 could have been saved on the cost of cigarettes since the ban²

Research from the UK's leading price comparison site revealed critical illness cover of £100,000 for a 30 year old male smoker over the next 25 years would cost £44.60 a month with Legal and General, but only £25.70 for a non smoker; a saving of £18.90 or 42 per cent - £5,670 over the full term¹. As the table below reveals a non smoking female with LV= would pay £5,346 less than a smoker.¹

Furthermore, since the smoking ban came into effect in July 2007 a smoker could have saved themselves £2,740 on cigarettes by going smoke-free².  However, recent statistics reveal fewer smokers gave up smoking during 2008, with 24 per cent fewer people quitting when compared to the same period in 2007⁴.

Emma Walker, head of protection at moneysupermarket.com said: "It has been two years since England's smoking ban came into force and there is no denying the benefits of kicking the habit.  The potential difference in the cost of protection premiums is vast, but in order to be classed as a non-smoker and therefore qualify for life-insurance premium savings, insurers insist on smokers having packed in for a full year⁵. Once smokers have given up for 12 months - this includes any tobacco-replacements products they might be on, such as nicotine patches -  they should go back to their insurer and ask for non-smoker rates, subject to tests to prove they've quit. So, if a smoker had given up on 1 July 2007, they would have been officially classed a non-smoker on 1 July 2008 - therefore over the past year they could have saved £227 on critical illness cover, or £58 on single life cover."

Considerable savings can also be made on single life insurance cover for the same scenario. It would cost £11.93 a month with AXA for a smoker but £7.12 a month for someone who has kicked the habit - a saving of 40 per cent each month, or £1,443 over the term⁶.

Emma Walker continued: "It's a shame to see the number of Brits kicking the habit has slowed since the smoking ban came into force - unfortunately those amongst us still puffing away are effectively letting their hard earned cash go up in smoke. Since the ban we have seen health-focused life insurance products enter the market, such as PruProtect's Vitality Programme. With the aim of encouraging policyholders to lead a healthier lifestyle, these providers also offer much-needed support to help smokers kick the habit."

Emma Walker added: "It goes to show leading a smoke-free lifestyle really does have its benefits. The better your health, the cheaper your protection premium - the savings to be made by ditching cigarettes are vast. It is essential to do your research though - shop around for the best deals currently available on the market and decide on the most cost-effective deal to best suit your circumstances."

moneysupermarket.com has the following tips when looking for protection:

• Don't always be lured by the lowest premium; look at policy coverage and extras within the cover to make sure you are getting the best value for money
• Make sure your answers are correct and give all of your relevant personal information and medical history, or a subsequent claim might be rejected
• Always review cover at life-changing events such as a change of job, having children, a change in marital status, increased debt or moving house
• When replacing a policy, always seek advice and compare like for like, as the premium may be cheaper but the coverage might not be as comprehensive. Never cancel anything until the new cover is in place
• If the premium is too big for your budget, consider getting some initial critical illness cover that you can add to later.

-Ends-
Notes to Editors:

¹ Single life or earlier critical illness cover:

Top five table based on a 30-year-old male wanting £100,000 over 25 years for single life or earlier critical illness cover

Provider	Monthly premium smoker	Total premium over 25 years	Monthly premium non-smoker	Total premium over 25 years	Saving per month by not smoking	Saving for term by not smoking
AXA	£41.63	£12,489	£24.19	£7,257	£17.44	£5,232
Fortis	£43.09	£12,927	£25.26	£7,578	£17.83	£5,349
Zurich	£43.90	£13,170	£25.60	£7,680	£18.30	£5,490
Legal & General	£44.60	£13,380	£25.70	£7,710	£18.90	£5,670
AEGON Scottish Equitable	£44.56	£13,368	£25.94	£7,782	£18.62	£5,586

Sourced by www.moneysupermarket.com 12.06.2009

Top five table based on a 30-year-old female wanting £100,000 over 25 years for single life or earlier critical illness cover

Provider	Monthly premium smoker	Total premium over 25 years	Monthly premium non-smoker	Total premium over 25 years	Saving per month by not smoking	Saving for term by not smoking
AXA	£33.87	£10,161	£24.01	£7,203	£9.86	£2,958
AEGON Scottish Equitable	£34.16	£10,248	£24.72	£7,416	£9.44	£2,832
Legal & General	£36.80	£11,040	£26.00	£7,800	£10.80	£3,240
LV=	£43.87	£13,161	£26.05	£7,815	£17.82	£5,346
Zurich	£36.20	£10,860	£26.10	£7,830	£10.10	£3,030

Sourced by www.moneysupermarket.com 12.06.2009

² A saving of £8,500 could have been made since the smoking ban:

  246 packets of 20 cigarettes per year at the average cost of £5.57 = £1,370.22 per year spent

  on cigarettes - multiplied by two for the two years since the smoking Ban = a saving of £2,740.

  2,750 x £5,670 (saving on critical illness cover with Legal & General for term by not smoking) =

  £8,500

³Since the smoking ban came into effect the average price of cigarettes is £5.57per packet of 20:

http://www.the-tma.org.uk/page.aspx?page_id=42

According to the Office of National Statistics, the average smoker smokes 13.5 cigarettes per day (14 for men & 13 for women), totalling 4,927 per year (or 246 packets of 20 per year).

http://www.statistics.gov.uk/downloads/theme_compendia/GHS07/GHSSmokingandDrinkingAmongAdults2007.pdf

⁴ According to a report from The NHS Information Centre (NHS Stop Smoking Services in England; April 2008 - September 2008), 24 per cent fewer people quit smoking during the period compared to the same period in 2007

^{http://www.ic.nhs.uk/webfiles/publications/Stop%20Smoking%20Quarterly%20Bulletins/SSS%20Q2%2008_09/SSS%20Q2%20Appendices%20final.pdf}

⁵ Non-smokers' must be cigarette free for 12 months but also free of tobacco replacement products. If someone is using nicotine patches for example, they will still be deemed a smoker.

 ⁶ Single Life Cover:

Top five table based on a 30-year-old male wanting £100,000 over 25 years for single life cover

Provider	Monthly premium smoker	Total premium over 25 years	Monthly premium non-smoker	Total premium over 25 years	Saving per month by not smoking	Saving for term by not smoking
Legal & General	£10.90	£3,270	£6.80	£2,040	£4.10	£1,230
Fortis	£11.84	£3,552	£7.08	£2,124	£4.76	£1,428
AXA	£11.93	£3,579	£7.12	£2,136	£4.81	£1,443
AEGON Scottish Equitable	£11.97	£3,591	£7.26	£2,178	£4.71	£1,413
Friends Provident	£10.96	£3,288	£7.43	£2,229	£3.53	£1,059

Sourced by www.moneysupermarket.com 12.06.2009

Top five table based on a 30-year-old female wanting £100,000 over 25 years for single life cover

Provider	Monthly premium smoker	Total premium over 25 years	Monthly premium non-smoker	Total premium over 25 years	Saving per month by not smoking	Saving for term by not smoking
Legal & General	£8.70	£2,610	£6.00	£1,800	£2.70	£810
AXA	£9.18	£2,754	£6.02	£1,806	£3.16	£948
AEGON Scottish Equitable	£9.35	£2,805	£6.03	£1,809	£3.32	£996
LV=	£9.47	£2,841	£6.17	£1,851	£3.30	£990
Fortis	£8.99	£2,697	£6.28	£1,884	£2.71	£813

Sourced by www.moneysupermarket.com 12.06.2009

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