The financial implications of smoking are well documented by anti-smoking pressure groups. Smoking 20 cigarettes a day will cost well over pounds 1,000 a year in 1996, and the Chancellor is pledged to raise tax by more than the rate of future inflation.
Smoking also costs the NHS more than pounds 600m a year, and the Royal College of Physicians estimates that smoking costs employers more than 50 million working days every year - which cynics would say is why employers have championed the cause of smoke-free working environments.
Insurance companies have taken the effects of smoking to heart and built them into their premiums. Scottish Widows will require a 29-year-old male smoker to pay pounds 20 a month for a 20-year term assurance policy paying out pounds 100,000. As a non-smoker he would pay pounds 11.90, just under 60 per cent of the smoker's premium. A woman smoker would only have to pay pounds 14, but a non-smoker would be charged only pounds 8.60, just over 60 per cent of the smoker's charge.
A male smoker aged 49 would have to pay pounds 116 a month, but for a non-smoker the cost falls to pounds 64.70, just over 55 per cent of the smoker's premium. For women the charges are pounds 70 and pounds 39.40. Rates and discounts vary from one insurer to another, but the universal lesson is that non-smoking men get slightly bigger discounts than non-smoking women, and male non- smokers are always considered appreciably better risks than female smokers at the same age.
Conversely a number of insurance companies, notable Stalwart, will actually pay smokers a larger annuity payment than non-smokers for every pounds 1,000 they invest in an annuity. This is not altruism but reflects the probability that smokers will live less long to enjoy their annuity.
Better news for smokers is that many insurers will offer non-smoking rates to smokers who have given up at least 12 months previously, and few consider it worthwhile trying to check if non-smokers have relapsed or started smoking after taking out insurance. Some insurers, but not all, do not count pipe or cigar smokers as smokers.