Quick notes:

  • Smoking raises an individual’s annual life insurance premium quote by 94%.
  • Smokers in their 30s typically pay 2-3 times as much for their life insurance premiums as nonsmokers.
  • Forty-one states allow insurance companies to charge smokers 50% more than nonsmokers.

 

 

There’s no doubt that smoking is a dangerous habit, and one that can lead to significantly negative health care outcomes.

But did you know that smoking hikes your life insurance bill by almost 100%?

That’s the smoking-hot take from a new study by LendEDU. The report, based on a survey of 35,000 life insurance quotes, shows that smoking hikes an individual’s annual life insurance premium quote by a whopping 94%.

Key findings from the study include:

— When accounting for the entire data set, the average life insurance annual premium quote for smokers was $3,977, while it was $2,052 for nonsmokers. This represents a premium increase of 94% for smokers vs. nonsmokers.

— The overall (smokers & nonsmokers) average life insurance annual premium quote was $2,241.

— For those looking for a 10-year term life policy with $250,000 in coverage, the average life insurance annual premium quote for smokers was $2,183, while it was $1,043 for nonsmokers.

“As th(is) illustrates, the data shows smokers, on average, will pay nearly double for life insurance premiums what nonsmokers will pay,” says Mike Brown, a data analysis expert at LendEDU.

Thousands of dollars in rising costs?

Insurance industry experts say that smokers can pay even more for a good life insurance policy.

“Smoking absolutely hikes life insurance rates up,” says David C. Lewis, an insurance specialist with Monegenix, a financial services company in Durham, North Carolina. “For example, on average, smokers in their 30s typically pay two-to-three times as much for their life insurance premiums as nonsmokers.”

If you’re rated standard (as most people are), you might pay about $425 per year for a $500,000 20-year, level term policy, Lewis adds.

“That same policy would be a little over $1,000 per year as a smoker,” he notes. “Over 20 years, you’re paying an extra $11,500 in premiums. That’s how much cigarettes cost you. As you get older, it gets worse. Smokers in their 40s and 50s pay three-to-five times as much as nonsmokers.”

States weigh in on life insurance and smokers

Government mandates are another big reason for the rising cost of life insurance for smokers.

“Forty-one of the 50 states allow insurance companies to charge smokers 50% more than nonsmokers. Arkansas, Colorado, and Kentucky charge less than 50% more while California, Massachusetts, New Jersey, New York, Rhode Island, and Vermont prohibit charging more due to smoking,” says Vinay Amin, health and wellness expert and CEO at Eu Natural, a health and wellness supplements provider based in Henderson, Nevada.

It’s difficult to provide a precise estimate of life insurance costs because there are heavy smokers and social smokers. Additionally, there are great variances in cost when it comes to insurance plans.

“However, here’s an example that should put the cost of smoking in perspective,” Amin says. “In the city of Chicago, for example, cigarettes can cost as much as $15 per pack. Illinois is also among the states that allow insurance companies to charge smokers 50% more and we’ll use their insurance premium of $300 up from $200 for a nonsmoker.”

“Between insurance and the cost of cigarettes, smoking for one year would cost this individual $6,675, enough for multiple luxurious vacations or even a used car,” he adds.

Out of pocket, out of mind

It’s not just life insurance that digs deeply into a smoker’s wallet or pocketbook. Just buying those smokes can snuff out the most carefully crafted household budget.

“At current prices, a box of cigarettes in the United States doesn’t come cheap,” says Deacon Hayes, a financial expert and the owner/founder of WellKeptWallet.com. “This habit will cost you approximately $5.50 per box on the average. In addition, some states have a ‘sin tax’ on cigarettes that drives the cost up even more.”

For example, if you’re a regular smoker, burning through one pack per day costs about $38.50 in a week, $167 in a month, and about $2,000 in one year.

“Overall, smoking a pack a day over a lifetime will cost you an average of $156,000 at today’s prices,” Hayes says. “Keep in mind, that figure doesn’t account for the costs of inflation or medical issues that could arise from this bad habit.”

For instance, smokers may require oxygen as well as an increased frequency of other medical tests. “They might even require radiation or chemotherapy for cancer diagnosis at some point,” Hayes adds. “All of these costs can add up to tens of thousands of dollars if not hundreds of thousands of dollars over a lifetime.”

Put another way, the high costs associated with smoking can have huge real-world cost implications.

“At about $7.00 per pack at one pack per day, that adds up to over $2,500 (a year),” says Todd Christensen, education manager at Money Fit by DRS, a nonprofit debt relief agency. “And, if you have a spouse or partner that also smokes a pack a day, your annual cost for smoking will be more than $5,100.”

Nobody cares about spending $7.00, but 99.99% of the population would care about spending $5,100, he adds.

“That is the equivalent of a very nice vacation for two just about anywhere in the U.S., monthly payments for a year on a brand-new Chevrolet Camaro, or a built-in backyard kitchen and grill,” Christensen says.

Quit — or pay a lot more for life insurance

The bottom line on smoking and life insurance?

“Don’t smoke,” says Lewis. “And, if you do smoke, make a plan to quit, especially if you need or want life insurance.”

A deeper dive — Related reading on the 101:

Learn more about life insurance, and what goes into the cost of a policy.

The first astronauts had to get creative to get life insurance.