How Much Are Your Vices Really Costing You?

I live a pretty clean lifestyle. That may have not always been the case. I decided smoking and drinking were cool when I was a teenager, but I have since changed my mind – for reasons both health-related and financial.

It’s scary to sometimes think about how much our bad habits cost us. I have friends who drop hundreds of dollars on weekends at the bar. However right now I’m at the stage in my life when I can’t help but think of all of the different things they could be doing with that money.

I came across an article the other day that surprised me. Everyone knows that alcohol and cigarettes cost, but I never considered that their usage would raise life insurance premiums. It makes sense, but it is not the sort of thing people always think of. Especially my soon-to-be-25-years-old self.

The article was called “How to save money on life insurance.” Pretty straight forward. I’ll give you the gist of it – cut back on your vices.

1. Smoking – We all knew this was going to be on the list. Nobody is really deluding themselves about the health risks associated with smoking anymore. Smokers know it isn’t good for them. BUT they may not realize that because of their habit their life insurance premium will be twice as high as a non-smoker. For example, a thirty five year old non-smoker who purchases $500,000 of term life insurance will pay about $40/month. A smoker of the same age will pay more than twice that amount.

2. Excessive Drinking – According to the article, a person is considered an excessive drinker when they consume 3-4 drinks a day. For these people (and those who drink more than 4 drinks/day) insurance premiums will be up to 50% higher.

3. Weight – Insurance companies use your BMI (Body Mass Index) as a factor in the cost of your premium. This number is based on your height and weight. A BMI over 30 is considered obese.

Those three vices all make sense to me as they increase your risk of health issues and decreases life expectancy. But the next one could potentially cause some heated debates...

4. Your Driving Record – You will be punished for a poor driving record. Your premiums can be up to 25-50% higher depending on your previous convictions. Obviously certain offenses will hurt your premium more than others. A history of drunk driving, reckless driving, and speeding will affect you more than parking tickets. Your heavy foot could be the death of you, after all.

And the final vice to fix to save you money:

5. Procrastination – Well, actually it is age, but the gist of this is that since life insurance premiums are calculated based on your age you will be quoted a higher rate the older you are. An example given in the article is that a person applying for life insurance at age thirty five will be quoted a higher rate than if they had applied a year or two earlier. For those late to get life insurance it may be better to have the policy backdated to an earlier age as this will bring your future premiums to a lower rate even if you will have to pay a lump sum amount for the previously missed years.

Now a good thing to mention is that if you rid yourself of these habits for at least a year your premium could be reduced. So if you quit smoking, excessive drinking, or lose weight and maintain this change for at least a year you can apply to the insurance company to reduce your rates. Minor driving offences may not be held against you after three years.

And as for procrastination... it is best to look into life insurance sooner than later. It’s a way to protect your family in case something happens to you. It does cost, but cleaner living can keep the costs down.

Your friends may call you lame – but the jokes on them for paying twice what you do for life insurance.

If you want to learn more about saving money on your Life Insurance in Saskatchewan click here.