Smokers who purchase a direct life insurance policy can expect to pay up to $150 a month more than non-smokers, a new study by CANSTAR has found.
The researcher looked at the average cost of $500,000 direct life insurance cover, comparing rates for smokers and non-smokers at various life stages. CANSTAR discovered that the average monthly direct insurance premium for a male smoker aged 50 was $285.58. This was more than double the cost for non-smokers, who could expect to pay an average of $139.18 a month. Female smokers were also impacted, with 50 year old women paying up to $92 more for their cover than their non-smoking peers.
At the younger end of the spectrum, direct life insurance premiums for a 20 year old male smoker were, on average, $27 more than for a non-smoker. For a female smoker of the same age, premiums were likely to be $20 a month more expensive than that of a non-smoker.
The price comparison was conducted as part of the researcher’s annual survey of direct life products to determine its annual star ratings. 24 direct-sold policies from 21 providers were compared, with three insurers receiving the CANSTAR 5-Star Award for Outstanding Value.
The 2013 Award winners were:
- Allianz
- ANZ
- Medibank
CANSTAR went on to highlight that customers who quit smoking after the policy was in-force could still take advantage of cheaper, non-smoker rates. ‘Over just 20 years, between the ages of 30 and 50, men could save on average $17,224.75 and women could save on average $10,825.25 on their premiums by being reassessed as a non-smoker,’ the researcher said in its report.
However, the likelihood of smokers giving up the habit to save on life insurance may be small, if the results from a recent survey by LifeInsuranceFinder.com.au are anything to go by. The online aggregator service, which compares a range of retail and direct life insurance policies, found that just 11% of Australians would be willing to give up the weekly cost of cigarettes in order to fund a life insurance policy.
“Clearly, Australians don’t want to sacrifice the costs of their lifestyle habits to fund a life insurance policy that will secure their families financial future,” said Fred Schebesta, Publisher of LifeInsuranceFinder.com.au.
