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Vaping and e-cigarette use on the up: will it cut your life insurance cost?

Paloma Kubiak
Written By:
Paloma Kubiak

Nearly three million people in the UK vape, the highest number since records began. But will stubbing out the cigarettes in favour of vaping mean you pay lower life insurance premiums?

E-cigarettes were first introduced to Europe in 2006 and they are considered 95% less damaging than cigarettes, according to Public Health England (PHE).

This is because the vast majority of the health-harming toxins in cigarettes aren’t caused by nicotine, but by the thousands of chemicals contained in burnt tobacco. E-cigarettes don’t burn tobacco and don’t produce smoke.

Latest Office for National Statistics figures reveal that smoking cigarettes is in decline, from 15.8% of the population in 2016 to 15.1% in 2017. This equates to 7.4 million people.

But vaping, or the use of e-cigarettes is on the up. The statistics reveal 5.5% of people in 2017 said they use the electronic products, equating to approximately 2.8 million adults in Britain. This has increased from the 3.7% reported in 2014 when the data started being collected.

The most common reason for vaping was as an aid to quit smoking (48.8%) and 29.2% perceived them to be less harmful than cigarettes.

But where do insurers stand on vaping? If they’re perceived as less harmful, does that mean you’ll pay less for your life insurance premium?

Is vaping classed as smoking?

We approached 10 major life insurers to find out whether e-cigarettes and vaping are considered as ‘smoking’.

The following insurers consider the use of all e-cigarettes, whether they do or don’t contain nicotine, as smoking. Here’s what they told us:

Beagle Street: “We define a smoker as someone who has smoked or used nicotine replacement products, including e-cigarettes, in the last 12 months, and a non-smoker as someone who has smoked nothing and used no nicotine replacement products for more than 12 months. We do not currently differentiate between vaping and smoking conventional cigarettes.”

L&G: “If you’ve smoked any cigarettes, cigars, a pipe, used e-cigarettes (whether or not they contain nicotine), or nicotine replacements at all in the last 12 months you need to answer ‘yes’ to the smoking question where you will receive smoker rates. Our stance is based on there not being any studies which show the long-term effects of e-cigarettes. However, recent studies suggest vaping is better for health compared to smoking cigarettes, but it appears clear they are still worse for you than not smoking at all.”

LV: “Someone is classified as a smoker if they have used any tobacco products including cigarettes, cigars or nicotine replacement products within the last 12 months. E-cigarette users are classified as smokers so until they have stopped using e-cigarettes for at least 12 months we will not be able to offer non-smoker rates and the price will not reduce.”

Vitality: “We are always looking at ways to help make people healthier, and enhance and protect their lives. Giving up smoking is one of the most effective ways for smokers to improve their health.

“We appreciate that vaping, a relatively new activity compared to smoking tobacco, does not have an entirely clear risk-benefit profile; there are multiple perspectives on how vaping affects current, ex-, and never-smokers. We do not presently incentivise vaping and are keenly following the debate as the evidence base for the impact of vaping grows”.

The insurers below state that the use of nicotine-free e-cigarettes is not considered as smoking so users will receive non-smoker rates on life insurance policies:

Aegon: “You’re considered a smoker if you have used any nicotine-based products in the 12 months prior to application. If someone smokes an e-cigarette, they will be classed as a smoker, unless they smoke ‘nicotine-free e-cigarettes’, and have done so for 12 months or more.”

AIG: AIG would classify someone as a smoker if they have used any products containing nicotine within the last 12 months, including nicotine replacement products. If someone uses a nicotine-free e-vape and has done for the last 12 months, or smokes less than five cigars a year, AIG treats them as a non-smoker.”

Aviva: “Customers only need to tell us about electronic cigarettes that contain nicotine. Therefore e-cigarettes that don’t contain nicotine don’t affect the premium and assuming the customer hasn’t consumed tobacco, nicotine, etc. within the last 12 months, we wouldn’t consider them a current smoker.”

Royal London: “The questions we ask on our application form are: have you smoked or used any tobacco, nicotine replacement products or e-cigarettes in the last 12 months? If the applicant answers yes to these questions we will apply smoker rates. However, if the customer isn’t using e-cigarettes as a nicotine substitute then we would offer non-smoker rates.”

Zurich: “Customers who vape or use e-cigarettes with nicotine are treated the same as a smoker when looking at life insurance premiums. However, those who vape without nicotine, and who don’t use any other form of tobacco or nicotine, are treated as non-smokers.”

How much more will you pay for your insurance?

Research by MoneySupermarket suggests smokers, including those who puff on e-cigarettes can expect to see increases in life insurance costs of up to 65% – typically £26 extra a month or £312.84 a year.

It analysed quoted premiums for life insurance policies between January and April 2018, and found the following:

  • Smokers pay £26.07 more for decreasing term insurance with critical illness cover (CIC) included
  • Smokers pay £16.59 more for level term cover with critical illness cover included – 48% more than non-smokers.

But, with decreasing term insurance, the amount the policy would pay out falls over its duration, the idea being that this sum reduces in line with an outstanding mortgage debt that is being repaid with a capital and interest loan. This helps cut the premiums compared to level term insurance.

The amount that would be paid out by a level term insurance policy remains the same for its duration.

Age is also an important factor, with monthly premiums rocketing when taking out a policy for over 45s: