Aviva Life research said that a smoker on an average pays Rs 12,292 annually as life insurance premium for a 10 year term plan with a sum assured of Rs 1 crore. On the other hand, a non-smoker only pays Rs 7853 annually as life insurance premium for the same policy. Term plans are those where you get the insurance amount only in the case of the death of the insured before the end of a policy term.
The private life insurer has also put the total cost of smoking for a period of 10 years at Rs 5.32 lakh. This includes an additional premium of Rs 44390, amount of Rs 3.32 lakh spent on cigarettes and Rs 1.56 lakh spent on healthcare. This has been calculated factoring inflation of 30 per cent. The cost of premium has been calculated based on the product Aviva i-Life, an online term plan of Aviva Life.
In India, 275 million people consume tobacco. The Aviva Life research further said that there has been a 4.19 per cent increase in domestic consumption of cigarettes in 2011-12, over the previous year.
While there is a lower-premium incentive offered to non-smokers by life insurance companies, there is no such incentive by non-life companies. The only differentiation here is those people who disclose that they are smokers, while purchasing a general insurance policy, have to undergo a more rigorous medical test than non-smokers.
Reliance Life eyes higher profits in Fiscal year 2014
After clocking full-year profits for two consecutive fiscals, leading private sector insurer Reliance Life today said it expects to clock much higher profits in the current fiscal 2013-14.
Part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital, RLIC (Reliance Life Insurance Company) registered a net profit of Rs 380 crore for the year ended March 31, 2013 -- marginally higher than Rs 373 crore in the preceding fiscal. The company had recorded its first full-year net profit in the financial year ended March 31, 2012. "Though profits of our life insurance business have been flat and new business premium as well as renewals have shrunk, our new business profit margins have grown over 20%.
