Smokers and Insurance: How much you could save by quitting.

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

A pack of 20 cigarettes has risen from around $13 to between $22-27 in 2017 depending on the brand of choice. With 10% tax increases set in law at least until 2020, smokers can expect that they will soon be paying upwards of $30 per pack or $1.50 for each cigarette. A pack a day smoker will be out $200 per week, a cost likely higher than all their groceries for the week combined.

In 2017, each of these set their owner back over $1 a piece.

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, TPD, income protection or health 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 of 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 and 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 would definitely thank you for it.

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Insurance Selection Advice

When our team of advisers considers your insurance needs and acts to helps you secure an insurance package, we use a set of criteria that in our experience produces the best results in both the long and short term for you the client.

We list it here to give you a perspective on what our experience has found to be the most important factors in insurance, which can differ greatly from what the public expects when they try to go it alone. We hope it helps you when it comes time to manage your insurance plans.

Ranked from Most to Least Important

1. Claims Paying Experience and Performance.

To our mind, the most important part of any insurance policy is how it will operate at claim time. This is the time you really need flawless service to ease your financial burdens and thus claims performance is the most crucial part of what we look for when we secure you an insurance package. Typically, the events that necessitate a claim come with considerable financial and emotional stress for you and those close to you. We look at the efficiency, fairness and sensitivity with which the insurer carries out their work at these times and make sure you have the most efficient and stress free claims possible.

2. Underwriting Performance.

During your life, things will have gone wrong or begun to have gone wrong with your health and these are of concern to the insurer. We require them to look at these issues in the holistic perspective of your entire life and come up with reasonable solutions that are competitive, fair and accurate. The performance of underwriters is defined by the amount of research they do into your specific circumstances and just how much of a balanced perspective they are prepared to take.

3. Policy Specific Wordings and Definitions Relevant to You.

We focus on the individual person and their individual needs. We look for the issues you face, and what you need from your insurance in order to achieve your outcomes. This is our starting point, rather than a product focussed outcome. Insurance should be tailored to an individual, as catch all insurance solutions can more often than not be inadequate. This is something anyone trying to get the right insurance should take into account, and something we insist on. 

4. Long Term Price Stability.

Changes to your health over time may prevent you moving to another insurer should your current insurer’s premium rates become uncompetitively expensive. We actively avoid insurers who have shown long term instability of premium rates, and our experience gives us the edge to know in which areas certain insurers perform better than others.

5. Immediate Cost.

The best option for you is rarely the cheapest option (as detailed more extensively in our article here), but our priority is always to ensure your insurance is competitively priced among the panel of insurers that we do business with. The most important selection criterion is thus to get the best possible deal for your needs that we can in terms of immediate cost.

If you're having trouble with your insurance, feel free to get in contact and our experienced advisors will get you the best cover possible that meets your specific needs and will save you hassle at claim time.

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Insurance: Why cheaper is not always better

Sometimes when selecting their insurance, people are inclined to gravitate immediately to the cheapest possible option. Cheaper is better right? Well, we definitely understand the desire to have more money in pocket, but in the insurance market, the best way to accomplish this may not actually be to dive straight in to the cheapest cover. What is crucial to know is that whilst insurance premium costs can sometimes be daunting, there are factors that are often neglected that can dwarf these costs in the long run. Unfortunately, when it comes to insurance, cheaper is definitely not always better.

One of the most important factors we look at when we seek out a policy for a client is how the insurer will perform at claim time. If a policy is cheap but the insurer will throw up obstacles when it comes time to claim on your policy, the cost both financially and emotionally can be immense. Our advice does take cost into consideration and always attempts to secure our clients the best possible deal, but from a larger and more beneficial perspective. We know that you don't want to be fighting battles with your insurer during your most stressful times, and even more crucially, we know that when things go wrong in your life, you need assurance that you will be supported financially promptly and with the minimum of concern.

Some insurers also can be more trying than others in their requirements for not only claims, but aspects such as policy alteration, changing direct debits, increasing, adding cover or underwriting. Your insurance needs to work for you, and do its job to cover your financial assets in the event of medical issues or permanent disablement, and sometimes it is worth spending a few extra dollars to secure the best possible service in all aspects.

With a bit of searching, research and a bit of professional advice, you can get insurance that's both effective and affordable. It just takes some time and a bit of inside help. We're happy to be that help. If you have any questions or concerns about what you're getting from your insurance let us know.

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