Kicking the smoking habit is not only a health-conscious decision, but also a financially sound one. People who give up smoking save much more than cigarette money — they also save on health care costs and insurance. A previous NerdWallet study found that quitting smoking can save consumers over $10,000 a year.
Life insurance companies take height and weight, blood pressure and other health metrics into account when determining life insurance quotes. Having a risky habit, especially smoking, dramatically impacts the cost you’ll pay. Men and women who smoke spend an average of $1,455 and $1,071 more every year for term life insurance, respectively, than those who are smoke-free, according to NerdWallet research.
Insurance premiums decrease each subsequent year after you ditch smoking, but you’ll need to avoid nicotine for five years before you’ll receive the same life insurance rates as nonsmokers.
[Life Insurance quotes are available through NerdWallet’s Life Insurance Comparison Tool.]
Long-term quitters see the biggest life insurance savings. Quitting a couple months before you apply for a life insurance policy won’t get you anywhere. It generally takes five years or more for ex-smokers to get the same rates as nonsmokers.
Switching to a different nicotine product won’t help. Most people who use nicotine gum, patches, lozenges, nasal sprays or e-cigarettes still pay smokers life insurance rates.
In most of the country, smokers pay about 351% more for life insurance than nonsmokers. However, smokers in Montana and New York pay around 363% and 297% more, respectively, for life insurance. Laws in Montana and New York have unique requirements for life insurance companies that affect how the states set prices.
Going cold turkey for one year can still deliver major savings on life insurance. On average, the smokers rates for men and women are $2,025 and $1,505 each year for a 20-year $500,000 term life insurance policy. Quitting smoking for an entire year reduces the average premium to $797 for men and $659 for women. After two years of not smoking, rates drop to $670 and $543. The Center for Advancing Health found that 80% of ex-smokers who quit for two years had quit for good. Life insurance companies will put consumers who have a lower likelihood of picking the habit back up in a lower risk category and drop premiums.
Life insurance rates for men: Nonsmokers, smokers and quitters
Life insurance rates for women: Nonsmokers, smokers and quitters
Life insurance strategies for ex-smokers
Here are a few important things for smokers and ex-smokers to know about life insurance:
- Don’t lie on your life insurance application. Your medical records and your life insurance medical exam, which includes a blood and urine test, will likely reveal your smoking habit. And if you’re an ex-smoker, your insurer might verify the amount of time you’ve been smoke-free by checking past life and health insurance applications you’ve made. Misleading your life insurer is considered fraud and can jeopardize your beneficiaries’ death benefit payment.
- If you start smoking after your policy is issued, you don’t need to inform your life insurer. That’s true for any medical problems you develop after the policy is issued.
- You can ask your insurer for a rate review if you quit smoking after buying a policy at smokers rates. The company will re-evaluate your health and smoking status and might grant you a better, nonsmoking rate. There’s no risk to you. Even if you’ve developed other health problems in the meantime, your rate cannot be raised.
Resources to help you quit
Quitting smoking is no small task, but there are resources that can help you kick the habit.
Joining a smoking-cessation program will help you with steps to quit smoking, as well as tips on healthier living. Talk to your doctor to find a program in your area.
Whether or not you’re a smoker, comparing life insurance costs can help you save money. Talk to your agent or use tools, such as NerdWallet’s life insurance comparison tool, to find the coverage and price that’s best for you.
Areas where over 1 in 5 adults are smokers
According to the Centers for Disease Control and Prevention, 17.8% of U.S. adults are regular smokers, but the rate varies by location. Below is a list of the major metro areas where over 1 in 5 adults are smokers.
We averaged life insurance quotes for 35-year-old and 45-year-old men and women for a 20-year $500,000 term life insurance policy, based on data from the NerdWallet life insurance comparison tool. Check out the tool to find the rates that you can expect. Data were collected in June 2015.
Jeffrey Chu is an analyst covering insurance for NerdWallet.
Image via iStock.