Smoking and Insurance Cost

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Everyone knows that smoking is an expensive habit, but most limit their focus to only the cost of the cigarettes themselves. While the cost of cigarettes can add up to nearly $1,500 a year, the truth is that smoking costs much, much more. There are a myriad of other costs associated with smoking that are often overlooked.

Smoking increases the cost of insurance across the board. From home insurance to life insurance, smokers spend much more on all of their insurance policies than non-smokers, because insurance companies view smoking as a high-risk behavior. Higher premiums are charged in order to compensate for the costly payouts that insurance companies make to individuals who smoke.

Higher Life Insurance Premiums

Life insurance companies have recognized that smokers hold life insurance policies for a shorter period of time due to increased health risks that lead to shorter life expectancy. Thus, they increase the price of policies for people who smoke to counter the loss in profits.

In fact, smoking is the most significant determining factor in the cost of life insurance policies. Individuals who smoke can expect to pay almost twice as much for life insurance than non-smokers. This is all due to the way that insurance companies determine their policy premiums. If you are a smoker, you fall into a higher risk category, resulting in higher premiums.

A comparison on a smokers life insurance quote website will show staggering results. With all of the factors, such as age, sex, location, size of the policy, and the policy term, exactly the same, the results will show that a smoker will pay approximately $100 more per month, or $1,200 a year.

The Increased Cost of Health Insurance

If individuals who smoke pay more for life insurance, then they obviously pay more for health insurance as well. Health insurance companies consider smokers extremely high-risk candidates for heart disease, emphysema, cancer, and a multitude of other serious health problems. Insurance is a business, and health insurance companies must compensate for the increased risks associated with smokers and protect their bottom line by charging higher premiums to people who smoke.

A comparison on a health insurance quote website will show the increased health insurance costs of smokers. With all of the other factors exactly the same, a person who smokes will pay approximately $40 more per month for health insurance coverage than a non-smoker. By quitting smoking, an individual can save around $480 a year on health insurance alone.

Higher Cost of Homeowners Insurance

Surprising to many, people who smoke also pay more for homeowners insurance. According to an article by MSN Money entitled “The High Cost of Smoking,” insurance companies associate smoking with an increased risk of damage to homes due to smoke damage and fires.

The statistics seem to back up this belief, because more than 20,000 homes catch fire each year due to cigarettes. Not only can unattended cigarettes burn down a home, but children may be likely to access lighters or matches needed for smoking, which increases the chances of accidental fires as well.

When the increased cost of life, health, and homeowners insurance is taken into account, the high price of smoking becomes quite evident. Smokers can pay nearly $2,000 a year more than non-smokers on insurance policies alone. If the cost of cigarettes are added into the equation, smoking costs individuals approximately $3,500 each and every year. After ten years, the savings accrued from quitting smoking would equal a pretty substantial down payment on a home. With such a high price to pay, in terms of finances and health, the number of people partaking in this costly habit is quite surprising.

By |April 23rd, 2015|Save on Insurance|Comments Off on Cost of Smoking From an Insurance Perspective

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