In recent years, the detrimental effects of smoking have been widely recognised, prompting many individuals to quit this harmful habit. Apart from the obvious health benefits, quitting smoking can also have a positive impact on your financial well-being. One area where you can experience significant savings is in your insurance premiums. In this article, we will delve into the benefits of quitting smoking and how it can lead to reduced insurance costs. We will explore the various ways in which insurance companies determine premiums and highlight the potential savings you can enjoy by kicking the habit.
The Cost of Smoking
Smoking is not only detrimental to your health, but it is also a costly habit. According to a study by NerdWallet, quitting smoking can save consumers over $10,000 a year. The American Heart Association reports that cardiovascular disease, which can be caused by smoking, is one of the leading reasons families declare medical bankruptcy. Smokers also pay more in other ways, such as decreased productivity and reduced property value. However, one of the most significant financial benefits of quitting smoking is the potential savings on life insurance premiums.
Understanding Life Insurance Premiums
Life insurance is a critical financial tool that provides financial protection to your loved ones in the event of your death. When determining life insurance premiums, insurance companies assess various factors, including age, health, and lifestyle choices. Smoking is a significant lifestyle factor that can have a substantial impact on the cost of life insurance. Smokers are considered at higher risk due to the numerous health complications associated with smoking, such as cancer, heart disease, and respiratory issues.
The Impact of Quitting Smoking on Life Insurance Premiums
If you make the decision to quit smoking cigarettes and no longer use nicotine products, you may be eligible for lower life insurance premiums. In New Zealand after 12 months of being tobacco-free, you can enjoy substantial savings by qualifying for non-smoker insurance premiums. On average, life insurance premiums for smokers are significantly higher than those for non-smokers. By quitting smoking for just one year, you can see a significant reduction in your life insurance premiums.
The Timeline of Savings
The savings on life insurance premiums are not immediate after quitting smoking. It takes time for insurance companies to recognise your tobacco-free status and adjust your rates accordingly. Typically, it takes at least a year of being tobacco-free to qualify for discounted non-smoker rates.
Vaping and Life Insurance Premiums
Vaping has gained popularity as an alternative to smoking traditional cigarettes. However, it is essential to note that insurance companies categorise vaping as a risky behaviour. Although vaping may be less detrimental to your health than smoking, there is currently limited data on the long-term health risks associated with vaping. Insurance carriers assess risk, and since vaping is a behaviour they consider unfavourable, it may prevent you from qualifying for non-smoker rates on your life insurance premium.
Seek Professional Help
Quitting smoking is a challenging endeavour, but the rewards are worth it. If you need assistance in quitting, reach out to your doctor or utilise resources such as Quitline on 0800 778 778 or by texting 4006. Quitline can help you create a personalised quit smoking plan and send you a Quitpack with helpful information and a Quitcard. Take the Quitcard to your local pharmacy for subsidised nicotine patches, gum and lozenges. Additionally, if you want to lower your life insurance premium, consider consulting a financial advisor or insurance professional who can provide guidance and help you navigate the process, such as RSFA (Rod Schubert Financial Advice).
Quitting smoking offers numerous benefits, including improved health and financial savings. By eliminating nicotine from your life, you not only reduce your risk of developing severe health conditions but also lower your life insurance premiums. The potential savings can be significant, providing you with the opportunity to allocate those funds towards other financial goals. Remember, the journey to quitting smoking may be challenging, but with determination and support, you can achieve a smoke-free life and reap the financial rewards. Take the first step towards a healthier and wealthier future by quitting smoking today.
Disclaimer: This article is for informational purposes only and should not be considered financial or medical advice. Please consult a professional advisor or healthcare provider before making any decisions regarding your insurance or smoking cessation.
This blog contains general information only. The opinions expressed in this article should not be taken as financial or medical advice, or a recommendation of any financial product. Please consult a professional advisor or healthcare provider before making any decisions regarding your insurance or smoking cessation. Rod Schubert Financial Advice (RSFA) shall not be liable or responsible for any information, omissions, or errors present. We recommend seeking professional legal and/or financial advice before taking any action. Our Disclosure Statements are available on our website.