 "Smokers spend 56% more than non-smokers on life insurance")
A smoker ends up spending 56 per cent more on a life insurance policy than a non-smoker. According to research by private life insurance firm Aviva Life Insurance, for a life cover of Rs 1 crore for a term plan of 10 years, a life insurance policy costs Rs 44,390 more for people who smoke.
Aviva Life research said that a smoker on an average pays Rs 12,292 annually as life insurance premium for a 10 year term plan with a sum assured of Rs 1 crore. On the other hand, a non-smoker only pays Rs 7853 annually as life insurance premium for the same policy. Term plans are those where you get the insurance amount only in the case of the death of the insured before the end of a policy term.
The private life insurer has also put the total cost of smoking for a period of 10 years at Rs 5.32 lakh. This includes an additional premium of Rs 44390, amount of Rs 3.32 lakh spent on cigarettes and Rs 1.56 lakh spent on healthcare. This has been calculated factoring inflation of 30 per cent. The cost of premium has been calculated based on the product Aviva i-Life, an online term plan of Aviva Life.
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In India, 275 million people consume tobacco. The Aviva Life research further said that there has been a 4.19 per cent increase in domestic consumption of cigarettes in 2011-12, over the previous year.
While there is a lower-premium incentive offered to non-smokers by life insurance companies, there is no such incentive by non-life companies. The only differentiation here is those people who disclose that they are smokers, while purchasing a general insurance policy, have to undergo a more rigorous medical test than non-smokers.