Drinking, Smoking Or Ill-health Can Increase Your Life Insurance Premuims
by admin on Aug.19, 2009, under Life Insurance
If you have a family history of ill-health or if you dink heavilyor are a heavy smoker you might be under the impression that critical illness cover or life insurance cover may be incredibly expensive. Marketing manager at Scottish Equitable Protect, Mr O, says this isn’t alwaysthe case, “Mostof thoseeating ‘too much’,excessive drinking or heavy smoking may wellhide from protection for fear of being incorrectly penalised for their awfulhabits. Hence, they will most likely find that these importantforms of financial protection cost even less than they think.”
Mr Y a specialist re-insurer, says only twenty per cent of the working population have life insurance protection and only 11 per cent havecritical illness insurance, even though it is generally accepted that if you are working and/or have a mortgage and dependants, this assurance is crucial. Vast amounts of people are taking unnecessary risks.
If a person were to die unexpectedly their life insurance policy will pay out on their death and with any luck will be enough to repay the mortgage, and/or provide any family with financial security. In the case of CICit pays out and helps at this time. Even though medicine is progressing all the time and people are getting better from life-threatening illness, they are often unable to work temporarily or are forced to give up completely; this is when a tax-free cash lump sum can create the financial security needed.
If a person does drink or smoke insurance payments will be higher but they do vary a lot between one insurer and another. And they also vary between critical illness cover and life cover. FriendsProvident doesn’t raise premiums until an intervidual is drinking the equivalent of four to five pints daily. For a non-smoking 34yr old, consuming less than 9 units per day, for 100,000 pounds of life insurance cover, the standard rate is 18.10 pounds per month. If you consume between 40 and 60 units weekly it increases to 28 pounds per month.
In relation, it will cost a 26 yr old non-smoker 18.70 pounds per month for 100,000 pounds of critical illness cover . For a smoker this goes up to 32.60 pounds monthly, but the premium only increases again if you smoke over 40 a day.
**A family history of conditions such heart disease or diabetes does not mean that premiums will be significantly higher. A 36 yr old physiotherapist, Mr L, comes from a family that has a lot of members suffering from diabetes although his grandparents and his parents do not. A few months ago, he and his wife took out life insurance and critical illness cover with Axa from Scottish Equitable Protect, supplying them with a cover of 125,000 pounds. Their monthly premium costs 39.50 pounds and Mr L was quite amazed that his families medical history did not affect what they pay.
A manager of LifeSearch, Mr X, says if you can’t afford to do both, it is sensible to cover your mortgage with life insurance and then take out as much CIC as is affordable.
”Any one who can afford it should have critial illness insurance,” he says. “If you’ve got children you should have life insurance and critical illness cover. The only people who may not need critical illness are those with excellent, not just standard, employee benefits.”
