Sunday, 2 August 2015

The Insurance Cost of Being a Smoker

Last week, I blogged about the cost of buying insurance at different ages. This week, we will discuss the insurance cost of being a smoker.

The chart below shows the difference in annual premiums for a level term insurance with critical illness benefits for a male with a sum assured of $1 million covering until 70 years old. Using age 25 as an example, a non-smoker would pay $3,149 in annual premiums for 45 years until age 70, while a smoker would pay $4,936. The difference is $1,787, or 57% more. The total premiums payable over the whole duration of the policy is $80,415 more for the smoker.

Difference in Insurance Premiums for Non-Smokers and Smokers

The percentage difference in annual premiums between non-smokers and smokers generally increases with age. At age 20, the percentage difference is 50%, while at age 65, the percentage difference increases to 71%. Thus, from an insurance point of view, it pays to quit smoking. If you have friends who are smokers, please share this blog post with them.

The above analysis is carried out based on level term insurance. There are other insurance products such as whole-life, reducing term and endowment insurance available on You can carry out similar analysis to determine how much you could save in insurance premiums by quitting smoking!

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