Smokers and insurance: How much you can save by quitting

by | Oct 31, 2021 | Insurance

With the latest cigarette and tobacco price increase having taken effect and plain packaging now fully mandatory throughout New Zealand, it’s more important than ever to consider the possible benefits to your health and your wallet of quitting. 

Statistics estimate that 15% of adult New Zealanders smoke, or a total amount of around 550,000 people. Smokers in New Zealand have it tough in so many ways, and it’s about to get even tougher. Not only are smokers mired in an unhealthy and destructive habit, every year this habit takes more and more out of them financially. Since 2010, due to new tax laws passed by parliament, the price of cigarettes and tobacco has risen dramatically.

A pack of 20 cigarettes has risen to between $29-$38 in 2021 depending on the brand of choice. Even with the mitigated price increase of 2021 when compared to previous years, a ‘pack a day’ smoker will still be out $200+ per week, a cost that is very likely higher than all their groceries for the week combined.

Unfortunately, that’s not all a cigarette habit can cost. If you’re a smoker and you have personal risk insurance in the form of life, trauma, total permanent disablement, income protection or health/medical insurance, you’re paying a lot more in premiums than non-smokers are. This is because as a smoker, you are more likely to develop serious health conditions and thus, you pose a much higher risk to the insurer. How much more will a smoker pay? In some cases it can be up to double the amount for a non smoker of the same age.

The good news is, that if a smoker manages to quit, their premiums can be revised and changed down to a non smokers level if the smoker manages to maintain it for a significant period of time. For instance, if you quit smoking 12 months ago and are paying smoker premiums on your insurance, you will be eligible to apply for changes and have your costs significantly reduced. A ‘pack a day’ smoker who manages to quit could easily save between $12,000-$15,000 a year through not having to pay for smokes combined with the savings on their insurance. That is enough for a significant vacation, a brand new car or many many shopping sprees. Even those who only smoke a pack or two a week could save around $5000 a year by cutting it out.

With the cost of the habit now sure to increase further in the years to come, now could be the time to dial it back or endeavour to quit entirely. Your wallet, your health and your insurance premiums would definitely thank you for it.

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