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Survey reveals smokers would lie to save on life insurance

  • Smokers could pay over 100% more on monthly life insurance premiums than non-smokers
  • 1 in 5 smokers would lie on their life insurance application to save money
  • Top tips for saving money on your life insurance premium

12 September, 2016, Sydney, Australia – Almost one in five smokers would lie about their unhealthy habit to save money on life insurance, according to finder.com.au, Australia’s most visited comparison website1.

A new survey of 2,033 Australians, commissioned by finder.com.au, shows that 19% of smokers would omit the fact they light up in order to pay cheaper premiums.

The analysis also found that smokers could pay over 100% more on monthly life insurance premiums, compared to non-smokers.

For example, a male non-smoker (35 years old) would pay $40.13-$48.19 on an $800,000 life insurance policy compared to $81.30-$97.80 for a smoker.

Bessie Hassan, Money Expert at finder.com.au, says kicking the habit can do your health – and wallet – a favour.

“Smokers can get slugged monthly premiums that are more than double that of non-smokers.

"Insurance providers don’t distinguish whether you’re a pack-a-day or a casual smoker; if you smoke at all you're simply categorised as a smoker under life insurance standards and guidelines.

"In fact, if you've had nicotine in your system in the last 12 months, you will pay more on your life insurance premiums,” she says.

Although most smokers are honest about their tobacco use, those that do lie on their application run a high risk of being caught out by their provider, warns Ms Hassan.

"Failure to provide honest information can lead to a disqualification for application or eligibility for making a claim."

Those who quit the habit will see their premiums begin to decrease, reduced to basic rates after being a non-smoker for one year, potentially savings hundreds, or thousands, of dollars in the long term.

According to the Department of Health, each year smoking kills an estimated 15,000 Australians and costs Australia $31.5 billion in social and economic expenses.

Ms Hassan urges those struggling to quit their nicotine habit to compare life insurance policies.

“It is a given that smokers will pay a higher premium than the regular policy holder, but if you jump online and research your options you can ensure you're getting the best policy for your personal situation. The peace of mind that comes with life insurance is invaluable.”

Demographic breakdown:

  • Generation Y smokers were almost twice as likely as any other generation to lie about their habit to keep life insurance premiums affordable.
  • Thirty-four per cent of Gen Y respondents admitted they would not divulge they were smoker compared to 18% of Gen X.
  • Baby Boomers were by far the most transparent with only 8% not sharing details of their smoking with an insurer.
  • State by state, South Australia was the most dishonest about their smoking with one in five (25%) lying about their habit.
  • The ACT had the highest honesty rate, at 90%.
  • Women (20%) were marginally more likely than men (18%) to be dishonest about their smoking.

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Disclaimer

The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.

About finder.com.au:

finder.com.au is one of Australia’s biggest comparison websites and has helped over 4.8 million Australians find better credit cards, home loans, life insurance, shopping deals and more since 2006. finder.com.au compares 250 credit and debit cards from 31 providers, over 300 home loan products, and information from 13 life insurance providers as well as online shopping promo codes, mobile phone plans, travel insurance and more. One Australian every five minutes is using finder.com.au or creditcardfinder.com.au to find better (Source: Google Analytics).

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