Insurance News UK Ex-Smokers Reportedly Paying Too Much For Life Insurance.
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UK Ex-Smokers May Be Overpaying for Life Insurance
Summary
A recent study by Sainsbury's Bank highlights that a significant number of ex-smokers in the UK could be overpaying for life insurance. While about 6.78 million people have quit smoking in the past five years, only a quarter have informed their insurers, potentially missing out on substantial savings.
Key Insights
Life insurance policies often require a person to be smoke-free for at least one year before reclassification as a non-smoker. Updating this status can lead to considerable savings on premiums. Sainsbury's Bank estimates that 2.2 million ex-smokers might be wasting around £126.72 million due to not updating their policies to reflect their non-smoking status.
Expert Opinion
David Picket, the life insurance manager at Sainsbury's Bank, states, "The health benefits of quitting smoking are well known, and so are the financial savings. Once you've quit, reviewing your life insurance could also reduce your annual premiums."
Potential Savings
Ex-smokers could save over 30% on their premiums by updating their status. However, many overlook this opportunity, missing out on substantial financial benefits.
Market Trends
Due to increased competition, basic term life insurance policies have become much more affordable, sometimes costing as little as £5 per month for healthy non-smokers. Moreover, companies like Moneynet suggest that existing policyholders might also benefit from reassessing their policies, as premium rates have generally decreased.
Factors Influencing Costs
Life insurance premiums vary based on age, lifestyle, and occupation. Different providers assess risk differently, and with numerous comparison sites like The Motley Fool and Moneynet available, consumers can easily explore their options. This accessibility has contributed to increased industry competition and lower costs.
Final Thoughts
While these trends are favorable for consumers, making changes to insurance coverage can be complex. The wide range of providers and products means that taking professional advice is crucial to ensure a product’s suitability.
Disclaimer
This article serves as general information and should not be considered as financial advice under the Financial Services Act 1986. It is recommended to seek professional guidance before making any binding decisions.
Useful Resources
- [Life Insurance Comparisons ?" Moneynet](http://www.moneynet.co.uk/insurance/index.shtml)
- [Financial Information ?" The Motley Fool](http://www.fool.co.uk/insurance/insurance.htm)
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