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Research Reveals Huge Differences In Life Insurance Premiums As Nearly 2.5 Million People Hope To Give Up Smoking In 2014

06 January 2014

With people making their New Year’s resolutions, research(1) from Sainsbury’s Bank Life Insurance indicates that nearly 2.5 million people are planning to stop smoking in 2014. The supermarket bank advises that kicking the habit could not only be great for their health but also save smokers a small fortune in life insurance premiums.

The research(4) reveals that for someone aged 30 taking out a policy providing £100,000 for 20 years, the monthly premium is on average 24.5% cheaper if they don’t smoke. Over the lifetime of the policy, they would save around £571. The corresponding figures for someone aged 50 are 51.6% and £6,770.

Sainsbury’s Bank is urging anyone who has given up smoking 12 months ago and who has not used any nicotine replacement products, to review their life insurance right away as they will now be classified as non-smokers and it could significantly save them in insurance premiums – depending on their age and medical circumstances. Its research suggests 9.9 million people gave up smoking more than a year ago, and have not used nicotine replacement products.

Life Insurance through Sainsbury’s Bank offers premiums starting from £5 a month(2) and provides lower quotes for smokers. It also offers double Nectar points (3) for two years on Sainsbury’s shopping, which, when you also swipe your Nectar card, is equivalent to 2% off your bill(5). So, if you spend £50 a week in Sainsbury’s, this would equate to Nectar points worth around £104 if redeemed in-store.(5)

Scott Gorman, Head of Sainsbury’s Bank Life Insurance said: “Giving up smoking can be a popular New Year’s resolution and as well as the health benefits, it could also save you a lot of money in life insurance premiums. However, you need to make sure that you have not smoked or used any Nicotine replacement products for at least 12 months to be classified as a non-smoker.”

Monthly life premiums for smokers vs. non-smokers

 

Age next birthday Average monthly premium – smoker £ Average monthly premium

non-smoker £

Monthly difference £ Monthly difference % Lifetime difference

25

8.53

6.96

1.57

18.4%

£376.80

30

9.72

7.34

2.38

24.5%

£571.20

35

13.40

8.61

4.79

35.8%

£1,149.60

40

19.81

11.58

8.23

41.5%

£1,975.20

45

32.67

17.01

15.66

47.9%

£3,758.40

50

54.64

26.43

28.21

51.6%

£6,770.40

Figures as at 19.12.13, source: Investment, Life and Pensions Moneyfacts Single life, £100,000, sum assured, 20 year term

Research(1) from Sainsbury’s Bank reveals that 805,000 people claim that they gave up smoking in the past year but have used nicotine replacement products during this period.

When you know what cover you require, please contact Sainsbury’s Life Insurance for a quote or further information on 0800 027 7166 (calls may be monitored and recorded). Further information is also available at www.sainsburysbank.co.uk or in store at Sainsbury’s. Sainsbury’s Life Insurance does not offer financial advice.

Notes to Editors:

(1) ICM interviewed a random sample of 2009 adults aged 18+ in GB online between 13th – 15th December 2013. Surveys were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.com

(2) Sainsbury’s Bank Life Insurance (Level Term Assurance and Mortgage Decreasing Term Assurance) is provided by Legal & General Assurance Society Limited. The cost of life cover will depend on the customer’s age, term of the policy, options selected and state of health.

(3) 1. Offer only available to customers who take out a new Sainsbury’s Life Insurance policy (with or without Critical Illness Cover), excluding Sainsbury’s Over 50s Life Insurance Plan.
2. You must continue to pay policy premiums for 2 years to continue collecting double points. 3. If the policy is cancelled, double points will cease from the cancellation date.
4. Only the first Life Insurance policy registered against each Nectar account will qualify for double points. You may qualify for additional points by taking out other qualifying products.
5. Base points on qualifying spend in Sainsbury’s will be collected as normal. A bonus equal to the total of these points each calendar month (subject to a monthly maximum of 2,500 points) will be credited to the Nectar account by the 10th of the following month, for up to 24 months from the policy cover start date. Excludes all Bonus point offers and points from Sainsbury’s Energy, Telecoms, Digital, Bank and all other Sainsbury’s services.
6. The monthly bonus will only be calculated on, and credited to the Nectar card nominated at the time of application. The nominated card must also be used at the time of each Sainsbury’s purchase and points will not be allocated retrospectively.
7. The Nectar loyalty programme is operated independently of Sainsbury’s Bank by Aimia Coalition Loyalty UK Ltd; and the collection and use of points is governed by the Nectar Collector Rules, set out in the registration pack and available at nectar.com
8. Sainsbury’s Bank reserves the right to alter, cancel or withdraw the offer without prior notice.

(4) Moneyfacts was commissioned to review whole of market life insurance premiums (level term only) for 10 different risk profiles in December 2013.

(5) If you spend £50 a week in Sainsbury’s 2% of this is £1. Over the course of a year (52 weeks), this would equate to £52, and over two years, £104.

Time period in which people have given up smoking but used a Nicotine replacement product in the past 12 months(1) Number of people who claim that they have done this
Past 12 months

805,000

1 – 2 years

220,000

2 – 3 years

45,000

3 – 4 years

29,000

4 – 5 years

98,000

Over 5 years

613,000

 

 

Age next birthday

Average monthly premium – smoker £

Average monthly premium

Non-smoker £

Monthly difference £

Monthly difference %

Lifetime difference

25

8.53

6.96

1.57

18.4%

£376.80

30

9.72

7.34

2.38

24.5%

£571.20

35

13.40

8.61

4.79

35.8%

£1,149.60

40

19.81

11.58

8.23

41.5%

£1,975.20

45

32.67

17.01

15.66

47.9%

£3,758.40

50

54.64

26.43

28.21

51.6%

£6,770.40