Is my life insurance premium too high?

Q I have just been accepted for life and critical illness insurance to cover a mortgage. But I am not happy with the premium, which has been almost doubled from the original quote on medical grounds.

I am 28 years old and have never suffered from serious illness. I rarely visit the doctor and keep myself in good shape. I smoke very occasionally, which I of course disclosed when applying for the policy. I also willingly gave a blood sample.

The only possibility I can think of for this higher cost is that my father died at 45 from a heart attack. But no-one else in my family has ever suffered a premature death due to illness.

The premium is ?38 a month more than the original quotation. I have asked the insurer to explain because I don't understand why it believes I am such a risk.

JL

A It's more than likely because you smoke. It doesn't matter to insurers whether you smoke the odd cigarette here and there or make your way through 40 a day - they will simply classify you as a smoker, and load your premiums accordingly.

This will certainly affect the cost of your critical illness insurance (which is not cheap to start with), as some of the conditions covered - such as heart attacks, cancer and stroke - have been medically linked to smoking. Life premiums are also loaded for smokers, because they have been proven to die younger.

For example, to cover a ?100,000 mortgage for 20 years with Tesco would cost a 35-year-old man ?9.20 a month. But if that same man smokes, his cover would cost ?14.70 a month - that's an increase of almost 60%.

It's irrelevant to the insurer that you are perfectly healthy and in great shape now - what its worried about is your future health and the likelihood of it having to pay out on either of your policies.

If your mortgage is conditional on you taking out this insurance you may have to just accept the cost. If, however, your lender is more flexible, do some shopping around for your policies, as you may be able to find cheaper cover elsewhere. But bear in mind that as long as you smoke, you will continue to come up against loaded life and health insurance premiums.