Smoking: the wrath of Cain

Financial planners need to come down harder on clients who smoke and don’t have life insurance, given that less than 8 per cent of life policies are bought by smokers, according to Russell Cain, chief executive of life insurance comparison service, xLife.

Cain said it was alarming that just 7.7 per cent of life cover was being taken out by smokers, considering smokers are more prone to “sickness, accidents and demise” because of the lifestyle and health issues associated with smoking.

“Smoking not only erodes a person’s financial situation, but it puts their family in a difficult financial position should they become sick,” he said.

Cain urged financial advisers to “rattle” their tobacco-smoking clients into looking after themselves and protecting their families, citing statistics that smoking is one of the leading causes of death in Australia, with lung cancer accounting for 20 per cent of all cancer-related deaths a year.

He admitted that smokers pay higher premiums than non-smokers, however he pointed out that the average smoker spent around $6000 a year on cigarettes.

He added that cover was often not as expensive as people thought, with a typical life insurance policy for $1 million starting from $557 per year for non-smokers and $956 per year for smokers.

“Smokers typically have shorter life expectancies than non-smokers and may have other health-related issues and by not taking out cover, they are potentially placing themselves and their families at financial risk,” Cain said.