Smokers Offered Special Insurance Policy Because They Die Earlier

Main Category: Health Insurance / Medical Insurance
Also Included In: Smoking / Quit Smoking
Article Date: 11 Feb 2008 - 1:00 PDT

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As smokers usually live shorter lives than non-smokers, financial solutions company Partnership has come up with the cheaper pension deal for people aged 50 or over who have smoked at least 10 cigarettes a day for the past 10 years.

Chairman, Ian Owen said, "It's an inescapable fact that the vast majority of smokers won't live as long as people who don't smoke."

"Although as a population we are experiencing increased longevity, the rate of improvement for smokers is a lot lower than for non-smokers."

"Smokers who take a standard annuity are being hit with a double whammy, which doesn't seem very fair to us. With our products, smokers will get a higher income, guaranteed for life."

A smoker on the special policy will end up with a pension 30 per cent higher than that paid to a non-smoker because their pension fund has to last for a shorter time.

It pays out a higher rate of income than a standard annuity because it is based on the holder's actual life expectancy rather than the average for their gender and age group.

Simon Clark, director of FOREST, said: "I suppose this is good news. It makes a change because smokers have been used to being targeted in negative ways in recent years."

"There will be a lot of people very interested in taking advantage of such a service because everybody knows the health risks associated with smoking."

Anti-smoking campaigners, were concerned smokers might see the policy as encouragement to continue with their potentially fatal habit.

Action on Smoking and Health (ASH) warned that people should not overlook the fact that the higher payments are based on the fact they they will die sooner.

Research manager, Amanda Sandford, said: "I do not think smokers should think 'I will benefit from it and it is a good deal'. They should ask why is it such a good deal and what is in it for the company?"

"The short answer is that sadly most of them will not live to reap the full benefits of it. If they really want to have a long and healthy retirement they should quit smoking."

But she added that she understood the insurance firm's approach, saying: "I do not think it is exploiting smokers, I think it is a realistic response to an actual situation which is the sad fact that smokers do not live as long."

http://www.ash.org.uk