If you smoke or vape, you may already know that getting insurance will be expensive– but how much more will you have to pay, and why? Here’s a quick guide to health and life insurance for smokers and vapers, and an overview of how different providers treat smoking.
What’s the risk?
Smoking kills 14 New Zealanders every day, and it’s estimated that up to two out of every three tobacco smokers will die from smoking-related causes. One in four cancer deaths nationwide is caused by smoking. Unfortunately, whenever they insure a smoker, insurance providers generally want to be compensated for taking on a higher level of risk.
Some of the best-known health problems related to smoking are lung cancer and other conditions related to the lungs such as emphysema and bronchitis. However smokers are also more likely than non-smokers to experience other health problems, including:
Stomach problems, including reflux and excess acidity
Cancer of the digestive organs
Strokes
Heart attacks and problems such as angina.
Gum disease, bad breath and smoker’s cough
Blindness
Acne and skin infections, and hirsutism in women
Complications during pregnancy: these can include miscarriages and ectopic pregnancies
- Smokefree NZ
Vaping (using e-cigarettes or another electronic device) is considered far less harmful to your body than smoking: however, it’s still recommended that you only vape if you’re in the process of quitting altogether. Here are some of the common health problems associated with vaping, taken from vapingfacts.health.nz:
Coughing
Dry mouth and throat
Shortness of breath
Mouth and throat irritation
Headaches
The long-term effects of vaping are not known. The risk of developing any form of cancer as the result of vaping is believed to be only a fraction of the risk attached to smoking - but at present, insurers in New Zealand tend to treat vapers the same way as smokers.
How much money can I expect to spend on health insurance?
The difference smokers and vapers pay in premiums compared to other people varies between health insurers.
Some companies, such as AIA and Southern Cross, don’t actually raise their premiums for smokers or vapers at all, due to the way their premiums are structured. Southern Cross does, however, have a Healthy Lifestyle Benefit (a 10% discount for two years) for people who do not smoke and also fulfil diet and lifestyle criteria. Via the AIA Vitality programme, you can also earn reward points if you’re smoke free for 12 months.
The most common approach on the part of insurers is to raise premiums by up to 20% for people who vape, or smoke. Here’s an example of what some other major insurers charge in fortnightly premiums, taking the example of an otherwise healthy 35-year-old man:
Accuro Smartcare+: $31.98 (non-smoker) $35.53 (smoker) +11%
NIB Ultimate Health: $31.36 (non-smoker) $37.63 (smoker) +19.9%
NIB Ultimate Health Max: $35.22 (non-smoker) $42.27 (smoker)+ 20%
Partners Life Private Medical Cover: $37.57 (non-smoker) $43.62 (smoker) +16.1%
If this man had a policy with Accuro and paid yearly premiums, he would end up paying $789 as a no-smoker, but $877 as a smoker: over a 12-year period, he would end up paying more than $1000 more. If he took the most expensive of these policies, Partners Life Private Medical Cover, he would pay $976 in annual premiums as a non-smoker - but $1134 as a smoker. In the same time period, he would pay more than $4000 more.
How much money can I expect to spend on life insurance?
If you want to take out life insurance, the penalty is even steeper. You may end up paying double, or even more, than a smoke free person would pay. Again taking the example of a 35-year-old man, with a $500,000 life insurance policy, here’s a comparison of several Kiwi insurers (using a stepped premium structure, that starts low and increases over time):
Cigna: $15.33 (non-smoker) $31.35 (smoker) +104.5%
Partners Life: $17.75 (non-smoker) $32.99 (smoker) +85.85%
Fidelity Life: $14.46 (non-smoker) $33.00 (smoker) +128.2%
AIA: $17.54 (non-smoker) $34.33 (smoker) +95.7%
Asteron Life: $17.97 (non-smoker) $35.74 (smoker) +98.87%
Over the course of your life insurance term, the expense can quickly add up. The most expensive life insurance policy we’ve compared, Asteron Life, costs $885 a year for a smoker, but only $445 a year for a non-smoker - and remember that over the years, stepped premiums will increase.
Taking out a life insurance policy as a smoker can very be costly: many smokers considering life insurance go through an insurance adviser, who can give them a detailed and accurate overview of the options out there.
The good news is you can book a free chat to an insurance adviser via Quashed today, to talk through your options. All you need to do is sign up to our free platform, and we’ll put you in touch with an experienced, independent adviser, with the relevant expertise to handle your life or health insurance queries.
Exclusions related to smoking
Some life and health insurance providers may choose to add exclusions into their policies, restricting your pay outs to non-smoking related causes: it always pays to read the fine print of your policy and ensure you know exactly what you're insured for.
Medical underwriting
Medical underwriting, prior to finalising a health or life insurance policy, generally involves a detailed check by the insurer of your medical history - and may also involve physical tests. One of the tests that can be performed looks for the level of Cotinine in your blood: Cotinine is a nicotine by-product, that circulates in your bloodstream for much longer than nicotine.
Taking small steps to improve your general health prior to applying for a policy is always a good idea: such as cutting down on the amount you smoke, looking at your diet, and making time to exercise.
What counts as smoking or vaping?
What counts as smoking and vaping for life insurance purposes can vary: to be considered a non-smoker you have to be smoke free for a minimum of 12 months, sometimes longer depending on your provider. You’re generally considered a smoker if you use:
Cigarettes
Cigars or pipes
E-cigarettes (vaping)
Chewing tobacco
Check with your insurer as to whether nicotine patches or gum are included, and whether you can receive any benefits if you try to go smoke free. Insurers always check your medical history, and if you are found to have been less than honest, you might find your policy is void or some of your benefits are cancelled.
Next steps
If you’re a smoker – for the purposes of your life insurance or health insurance provider – it’s a good idea to get an experienced insurer adviser to help you find the best insurance product for you. Look for an agent who has knowledge of a wide range of providers, will be able to provide detailed insight into how different insurers treat smokers.
It’s very important to be completely honest with both your adviser, and your insurance provider. For more information on health insurance and life insurance, you can check out Quashed’s brief guides – or take a look at our blogs.
When you have your health or life insurance policy, don't forget to upload it to Quashed! Our free platform lets you see all of your policies in one place.
