Using electronic cigarettes is usually more cost-effective than smoking real cigarettes. However, this cost efficiency is not extended to life insurance premiums. Smokers usually pay more for life insurance premiums than the non-smokers. Yet, the cost of insurance premiums for vapers is usually affected by nicotine and non-nicotine ecigs.
Ecigarettes contain no tobacco that usually does the damage. Some of them also contain no nicotine. The health implications of electronic cigarettes are not yet known and debates are ongoing on whether ecigs should be treated like traditional cigarettes.
In the UK, all nicotine containing products will be treated as medicines beginning 2016. MHRA or Medicines and Healthcare products Regulatory Agency has warned that the quality varies considerably.
In 2013, there were about 1.3 million smokers who switched to vaping, but insurers are still establishing their definite position.
Insurers Vary In Ecig Stance
Nicotine and Non-nicotine ecigs affect insurance premiums depending on how they are treated by the insurers. The best approach is to ask insurers about their individual terms of policy for ecigarette user.
Linsey White, spokeswoman of Association of British Insurers said that people should contact their insurers. They are advised to always make it known to their insurers about their ecigarette use as well as any other kind of tobacco/nicotine product.
If a person has not used tobacco in the previous 12 months and use just nicotine-free ecigarettes, they might be entitled to answer no to the smoking questions. This, however, should be always discussed with the insurer. She also added that it is worth considering that the long-term health implications of ecigs are not yet known.
A LV spokesperson remarked that ecigs are considered nicotine replacement products and imply that the user has possibly used or resumed using the traditional cigarettes. Ecigarette users are, therefore, categorized as smokers for life insurance applications.
Aviva spokesperson also stated the same stance and said that premiums are not based on the status of smokers so customers are not asked whether they use or smoke ecigarettes. For applications on life insurance, nicotine replacement product users (including vapers) are considered as smokers.
When ecigs were introduced, they were marketed as smoke cessation aids and as such, it is unlikely that any user would not have also used tobacco products within the last year and is thus considered a smoker. The spokesperson added that it now appears that ecigs may be used as genuine cigarette alternative and that the company’s position may be reviewed in the future.
Enquiries are occasionally received by the company from users claiming they use only the nicotine free inhaler. An applicant could be entitled to answer no to questions pertaining to smoking if he/she has not used nicotine or tobacco in the last 12 months. He/she could also get non-smoker rates.
Zurich UK Life head of retail propositions Peter Hamilton added that there have been a lot of discussions in the insurance industry regarding electronic cigarettes but the benefits are not yet fully established.
Most users of nicotine ecigs are smokers trying to quit. Their success rates appear to be higher than those trying to quit using other forms of NRTs. Yet, the vast majority of ecig users still smoke and some revert back to smoking.
Mortality rate for smokers does not really start to fall until the smokers have given up smoking for a minimum of 12 months. Thus, ecig users are still treated as smokers due to the high chance of relapsing and due to the unknown long term health impacts of vaping.
If a person is using non-nicotine ecigs, he/she will be treated as non-smokers provided that they have not smoked tobacco or other nicotine product in the last 12 months. The impact and the evidence will be monitored. Refinement in pricing that will differentiate real and electronic cigarettes in the future might be seen as more information becomes available.
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