Although
naturally grim in its circumstance, life insurance can be an important safety
net for a policyholder’s loved ones.
But
having life insurance comes at a cost, so
consumers must weigh the pros of paying for a policy against the potential
consequences of not having one.
That
cost depends on the policy and the person. Things like age, medical history,
current health, and smoking habits can alter a person’s annual life insurance
premium.
For
example, because smoking is detrimental to a person’s health, policies for
smokers are more expensive to account for the increased likelihood of mortality
within the policy term.
Just
how much can smoking increase a life insurance policyholder’s premium?
To
answer this, LendEDU teamed with BestLifeRates, an independent life insurance
marketplace. Using exclusive data from about 35,000 life insurance policy
quotes provided by BestLifeRates, LendEDU analyzed the dollar difference in
life insurance policy quotes between smokers and non-smokers.
How Smoking Affects Life
Insurance Costs
The
data featured in this report was anonymized and provided exclusively to LendEDU
from BestLifeRates. Users can go to BestLifeRates.org, enter their personal
information, and receive life insurance quotes based on their circumstances,
including whether they are a smoker.
BestLifeRates
works with NinjaQuoter to gather the data and
provide quotes to users.
On Average, Smokers
Will Pay Nearly Double the Life Insurance Premiums of Non-Smokers
As the
above graphic illustrates, the data shows smokers, on average, will pay nearly
double for life insurance premiums what non-smokers will pay.
The
average annual life insurance premium BestLifeRates quoted for smokers was
$3,977, while this figure was $2,052 for non-smokers. These figures indicate
that smoking could increase life insurance premium costs by 94%.
The
average annual life insurance premium quote for the entire dataset, including
both smokers and non-smokers, was $2,241.
The
above figures do not account for things like age, type of policy, or coverage
amount. We’ll look at those below.
The
graphic above represents all consumers who requested a quote for a 10-year term
life insurance policy with $250,000 in coverage. This breakdown shows how
smoking can impact annual life insurance premium quotes for consumers who were
all looking for the same life insurance product.
With
nearly every age group, with the exception of the youngest and oldest, smokers
got life insurance quotes with annual premiums that were more than double those
non-smokers received.
When
age was not factored in, smokers in this subsection collectively got quotes for
their premiums that were 109% more than what non-smokers got.
Removing
smoking from the equation, the graph also depicts how age greatly impacts what
people may pay for life insurance policies. For example, while the average
annual premium quoted for those in their 20s was $155, it was $4,793 for those
in their 70s.
This is
because, as a consumer gets older, their health risks generally increase,
making them riskier for life insurance companies.
Methodology
All
data found in this report was anonymized and provided exclusively to LendEDU by
BestLifeRates, an independent life insurance marketplace. The dataset features
over 35,000 unique life insurance quotes that were provided to visitors of
BestLifeRates.org who were looking for a life insurance policy quote based on
their unique circumstances.
BestLifeRates
works with NinjaQuoter to collect and analyze the user data to provide life
insurance policy quotes.
The
data that was included in this report has been collected over an extended
period of time, starting in October of 2016 and ending in September of 2019.
The data includes things pertinent to providing a life insurance policy quote,
like smoking habits, age, location, coverage amount sought, and whether the
consumer was looking for a whole life or term life policy.
The
annual premium amounts that were quoted for each consumer are projections made
by BestLifeRates and NinjaQuoter and may not accurately reflect the terms that
the consumer ended up receiving. Additionally, specific types of smoking habits
that may alter the life insurance policy rate were not specified, including
whether the consumer was vaping, smoking cigars or cigarettes, or smoking
marijuana.
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