Smoking lights up your life insurance premiums

Updated: Sep 11

An online survey by the Research Unit on the Economics of Excisable products at the University of Cape Town (UCT) found that an estimated 800,000 to a million smokers had chosen to end the habit after the ban on the sale of cigarettes during lockdown dragged on for months.

If you could get a fix during lockdown you had to fork out up to four times as much as you would normally pay for a packet of cigarettes.

To be considered a non-smoker you have to have given up smoking for at least six months and you would have to pass a cotinine test, Lisa Gibbon, divisional executive of onboarding at Liberty, says.


Cotinine, nicotine's main breakdown product, can usually be detected in your body for up to three months after ingestion. Most insurers require that you have not smoked for 12 months before you are considered a non-smoker.


The consensus among life insurers is that more people are giving up.

John Kotze, Old Mutual’s Head of Retail Protection Solutions, says Old Mutual has seen a consistent shift from smokers to non-smokers.

Only 9.3% of Old Mutual’s underwritten lives for the first half of this year were smokers. Over the past three years, there has been a reduction of 0.4% in the number of smokers on average per year, he says.

Laurence Hillman, CEO of 1Life, says their book shows less people are smoking this year compared to the same time last year – which could potentially indicate that more people are opting not to smoke.

About 17% of Momentum Myriad’s life insured book consists of smokers, Jenny Ingram, head of product development, says.

Over the past 10 years, the proportion of smokers has reduced somewhat and in the past few months the company saw an increase in alterations where policyholders changed from smokers to non-smokers, she says.


Why are smokers a higher risk?

Dr Friedel Kerchhoff, the chief medical adviser at Sanlam, says smoking is the leading preventable cause of death across the world. “Tobacco-related deaths annually number up to six million (one in 10 deaths – more than the combined death total for HIV/Aids, malaria and TB). Most deaths are related to the direct use of tobacco and a smaller number due to second-hand smoke exposure in non-smokers,” he says.

Smoking also affects the rate of disease – and is the second leading risk

factor for the burden of disease worldwide.

“This morbidity burden alone has profoundly serious economic consequences in terms of lost income, and healthcare costs,” he says, and affects insurers which is why smokers pay more for cover.

So, how much more do you pay for life insurance as a smoker?

Kerchhoff says the premiums smokers pay could be up to four times higher than those offered to non-smokers.

If you fail to disclose that you are a smoker when you take out a life insurance policy, this can result in your policy being voided – no payout when you die – or a reduction in the payout when a smoker surcharge is applied retrospectively.

Money asked life insurers what the insurance premium would be on a R2m life policy for a 33-year-old man, working in admin, and how it would differ if he was a smoker.

  • Liberty said the non-smoker would pay R328 a month, while the smoker would pay R478 a month.

  • Momentum Myriad said the smoker would pay about 80% more than the non-smoker.

  • Old Mutual said if the smoker earns R25,000 a month, has no other net assets, and wants a level cover of R2m with a level premium, the premium would be R442 a month for the non-smoker versus R739 for the smoker.

Originally appeared in the Sowetan

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