An Easy Way To Save 65% On Your Life Insurance

Find out the trick to cheap life insurance here...

Many of us like to get in shape in the run up to the summer months. As our health and lifestyle often become more important at this time of year, you may be thinking the time has come to give up smoking for good. Aside from the very positive health benefits, saying no to cigarettes also has a fantastic financial incentive. Of course, smoking is expensive. The savings you make by quitting can mount up very quickly. But did you know that non-smokers spend far less on their life insurance too? The price you pay for your life insurance premiums is linked to the risk of a claim being made. If your insurer decides the risk is low, you'll enjoy cheaper cover. But if you're a smoker, the risk of making a claim is greater. To balance that out, the insurer will charge you higher premiums for the same policy. And the difference between the two sets of rates can be staggering: Top Six Life Insurance Premiums: Smokers Versus Non-SmokersCompany Males Aged 35 Smokers Company Males Aged 35 Non-smokers M&S Money £12.75 M&S Money £7.55 Sainsbury's Bank £13.10 Lutine Assurance £7.95 AA £13.41 AA £8.18 Tesco £13.20 Friends Provident £8.29 Friends Provident £13.86 Tesco £8.30 Norwich Union £13.90 Post Office £8.33 Company Females Aged 35 Smokers Company Females Aged 35 Non-smokers AA £9.35 Lutine Assurance £6.20 M&S Money £10.35 M&S Money £6.35 Legal & General £10.40 LV= £6.79 Sainsbury's Bank £10.50 AA £6.80 Tesco £10.50 Tesco £7.07 AXA £10.81 Post Office £7.13 Source: Moneyfacts. Premiums as at 3 June 2008. Monthly premiums are for £100,000 of level term life insurance over 20 years for a healthy person. The premiums are guaranteed throughout the term. So let's compare the costs: Men who smoke would pay £12.75 a month for £100,000 cover from M&S Money. Meanwhile, men who don't smoke would pay just £7.55. Over a 20-year term, non-smokers would actually spend £1,248 less on their life insurance policy than smokers. Looking at it another way -- comparing the best premiums on the market -- men who smoke would pay over 65% more for the same level of cover. And it's a similar story for women. Female smokers would pay £9.35 a month for the most keenly priced policy available from the AA, while non-smokers would spend just £6.20 through Lutine Assurance. This time the savings for women who don't smoke run to £756 over 20 years. Smokers, meanwhile, will have to stump up for premiums which are more than 50% higher. Smoking Ban It has almost been a year since the smoking ban was introduced. On 1 July 2007, a new law made almost all public places and workplaces smoke-free, leading thousands of people to give up smoking. If you're one of those people and you have a life insurance policy, the time has come to rethink your cover. Most insurers will class you as a non-smoker once you haven't smoked any cigarettes (or used nicotine replacement products) for just one year. This means, if you quit when the smoking ban came in, there's just a few short weeks left until you'll qualify for non-smoker rates. We've already looked at how much cheaper life cover is for non-smokers, so it makes sense to apply for a replacement policy based on non-smoker rates. If you can get cheaper premiums, why not set-up a new, lower cost policy, and cancel your outdated one? You can do this quickly and easily by comparing quotes at The Motley Fool Life Insurance Service. But there's an important factor you should think about before you change your cover: If your health has deteriorate, or you are significantly older since you took out the original policy, the cost of a new plan could be a whole lot more expensive. If this happens, it's better to stick with your old policy, even if that means being stuck on smoker rates. That said -- all things being equal -- you should be able to benefit from lower cost life insurance as a non-smoker. And just think -- the extra money you save on your new policy can be put to far better use enjoying yourself this summer! And finally, don't forget these tips: Make sure you don't lose out on any valuable extras -- such as free terminal illness cover -- that might have been included in your old policy when you switch to a new one. Check exactly what's covered in the old plan before you cancel. Don't cancel the old policy until the new plan is up and running to make absolutely sure there's no gap when you aren't fully insured. Compare life insurance quotes at Fool.co.ukThe comments above are the opinions of the author only and do not represent advice specific to your circumstances.This article has been approved and issued by Direct Life & Pension Ltd who are authorised and regulated by the Financial Services Authority. The Motley Fool Insurance Service and The Motley Fool Life Insurance is a trading style of The Motley Fool Limited.