Q. I finally quit smoking in June 2018 and, thankfully, I can now say I have done so for good. I was telling a friend recently how much I had saved on the cost of cigarettes over the past 15 months, and they said I should be saving on my life insurance premiums, which should have reduced because I am now a non-smoker. Is this really the case?
A. Given that you have been off the cigarettes for more than a year now, you could qualify for non-smoker rates on your life assurance policy, according to Sara Murphy of insurance company Royal London. The first thing you should do is contact your financial broker or insurance provider, she said.
You will then, most likely, need to complete a form confirming you have abstained from the use of any tobacco products in the past 12 months, including e-cigarettes and nicotine replacement products, and that giving up was not due to a serious medical condition. And you will need to confirm that you intend to continue to abstain in the future. In some cases, you could be asked to complete a cotinine test (smoker test). This is a simple test which involves screening a sample of saliva or urine for tobacco use, Ms Murphy said. A Royal London cost analysis earlier this year showed that a 44-year-old smoker with a life assurance policy of €300,000 could expect to pay around €108 per month.
Their non-smoking counterpart could expect to pay around €53 per month.
Over the lifetime of a 25-year policy, that is a saving of more than €16,600.
Q. Can I change my renewal date to avoid a price increase on my health insurance policy?
A. Unfortunately, this is not possible with your existing insurer, since they will hold you to your specific renewal date as you are in an annual contract, according to Dermot Goode of TotalHealthCover.ie. However, if the renewal is November 1 and you were thinking of switching to a different health insurer, you could potentially set up a new policy with an alternative insurer effective from October 31, to avoid any price hike it was introducing effective from November 1. You would have two policies in place for one day only, but this could enable you to avoid a price increase for a further 12 months.
Q. We have a small group health insurance scheme for five employees due for renewal on November 1, and we have remained on the same plan for some years now. Can we negotiate with the insurer to get them to waive the price increase coming into effect on November 1?
A. Unlike other insurance, such as motor or home policies, which are risk-rated policies, health insurance in Ireland is based on a community-rated model. This means that everyone should be charged the same premium for the same policy, irrespective of their age, gender or medical history. Health insurers are not allowed to vary their pricing based on bulk purchasing, according to Dermot Goode of TotalHealthCover.ie.
However, for company-paid schemes, there are discounts of up to 10pc available on certain corporate plans.
But this has to be negotiated directly with the insurer or through an intermediary.
Given that this company has been on the same plan for some time, it is likely that it is over-paying, which means extra cost for the firm and also for its employees in terms of benefit-in-kind, Mr Goode said.
The company should engage with its insurer as soon as possible to seek a lower-cost equivalent plan.
Q. My wife and I are looking to set up a comprehensive life insurance package for our family. We have set up basic cover over the years, but now want to consolidate and update what we have. What should we look for in a good adviser?
A. Sara Murphy of Royal London recommends you get the help of a financial broker.
Whether you meet face-to-face or conduct dealings online or on the phone, a financial broker will take time to get to know you, your budget and your personal circumstances, she says. They can then assess what cover you have in place through mortgage protection, pension schemes, other policies and any social welfare benefits, discuss your options, and recommend the products and providers that would best suit your needs.
Since a broker is not connected to just one provider, they can shop around on your behalf, compare policies and make sure you get the best value too.