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How your New Year’s resolutions could cut your insurance costs

Cutting back on smoking, drinking and junk food could reduce life insurance premiums


We’re a week into 2015 and many people’s New Year’s resolutions are already out of the window – but sticking to healthy habits could help to reduce your life insurance premiums.

Good intentions

Some of the most common resolutions include losing weight, cutting back on alcohol or quitting smoking. As well as healthy habits, many people choose a resolution that can go hand in hand – cutting back on unnecessary spending.

Unfortunately, research from the University of Hertfordshire found that only 8% of those who make resolutions actually achieve their goal, and most fail as early as early as January 23rd, just over three weeks into the year.

But if you haven’t given up on your resolutions yet, it’s worth sticking to them. Cutting down on smoking, takeaways and alcohol is not only good for the weekly budget, but you could also save in the long term on your life insurance and even your car insurance.

Effect on insurance costs

Life insurance premiums are based on many factors, including your general health. Unhealthy habits such as smoking, drinking and excessive eating act as red flags for insurers, who will load your premium

Giving up smoking can have a drastic impact on your life insurance costs. Smokers’ premiums could be double that of non-smokers – that includes smoking cigarettes, cigars, tobacco, and vaping e-cigarettes. Insurers will usually consider you an ex-smoker once you’ve given up for 12 months. Some car insurers even penalise drivers who smoke, as they consider it a distraction to smoke at the wheel. You could see an immediate saving on your car insurance by quitting.

It may be a touchy subject, but insurers will also take your weight into account when calculating your life insurance premium. They will often ask for your height and weight in order to calculate your BMI (body mass index). If your weight is above a healthy BMI (18-25), you could be charged up to 250% more. Your application could even be declined if your BMI is considered to be dangerously high (40+).

As regular and excessive drinking can lead to health problems, you will also be asked about your drinking habits. The recommended weekly limits are 12 units for men and 14 units for women. One unit is equivalent to a single measure of spirits, while a small glass of wine is 1.5 units and a pint of lower strength beer comes in at 2 units. If you exceed these limits regularly, your insurance costs could increase, and the more you exceed the limits by, the higher your premiums could be.