How Much Can You Save on Life Insurance by Quitting Smoking or Vaping?

Quitting smoking or vaping can reduce life insurance premiums by up to 50%, potentially saving policyholders over €700 annually. Data from Royal London Ireland indicates that a 44-year-old who has been nicotine-free for at least 12 months could save over €18,000 on a standard 25-year mortgage protection policy, with even greater savings available on serious illness cover.

Key Takeaways:

Massive Savings: Premiums can drop by half for non-smokers.
Vapers Included: Insurers classify vapers as smokers, subjecting them to higher rates.
Long-Term Impact: Total savings over a 25-year policy can exceed €70,000 for serious illness cover.
Nicotine-Free Rule: You typically need to be nicotine-free for over a year to qualify for lower rates.

Life insurance premiums for smokers and vapers are significantly higher than for non-smokers due to the increased health risks associated with nicotine use. New data from Royal London Ireland highlights the substantial financial incentive for kicking the habit, revealing that policyholders could save tens of thousands of euros over the lifetime of their cover.

The Financial Cost of Smoking on Insurance

Insurers view smoking as a major risk factor, and this is reflected in the cost of coverage. According to Royal London Ireland’s recent cost analysis, the difference in premiums between a smoker and a non-smoker is stark.

For a 44-year-old individual taking out a €300,000 life insurance policy over a 25-year term, quitting nicotine can lead to impressive savings:

Policy Type	Annual Savings	Total Savings (25 Years)
Life Insurance (€300k cover)	€731	€18,279
Serious Illness Cover (€300k cover)	€2,920	€72,990

These figures demonstrate that the “smoker tax” on insurance is substantial. Barry McCutcheon of Royal London Ireland advises, “If you’ve been nicotine-free for over a year, contact your insurer to ensure you’re benefiting from lower premiums.”

Vapers Are Classified as Smokers

A critical misunderstanding among many consumers is the status of vaping. Despite being widely used as a smoking cessation tool, insurers classify e-cigarette users as smokers. This means vapers pay the same elevated premiums as traditional cigarette smokers.

This is particularly relevant given the sharp rise in vaping in Ireland. Daily e-cigarette use among adults has jumped to just under 10%, up from one in 33 in 2016. The trend is even more pronounced among youth, with 18% of those aged 15-24 vaping at least occasionally. McCutcheon warned, “There is a real danger that e-cigarette users mistakenly believe… they won’t be deemed a smoker when seeking or renewing life insurance. This is not the case.”

The Broader Financial Picture

Beyond insurance, the daily cost of a smoking habit is staggering. With a packet of 20 cigarettes now costing around €19 in Ireland, a 20-a-day habit drains approximately €6,935 per year from a smoker’s wallet. Over 25 years, this amounts to nearly €175,000 spent on tobacco alone.

Combining the direct cost of cigarettes with the potential savings on life assurance and serious illness cover creates a compelling financial argument for quitting. As McCutcheon summarized, “Aside from the evident day-to-day cost savings… those who quit could also save themselves thousands of euros on their life-insurance premiums.”