The high cost of smoking

Insurers weigh in, and they're not happy

We pulled some online quotes on 20-year term life insurance (a $500,000 policy) for a healthy 44-year-old male through BudgetLife.com. The lowest quote for a nonsmoker was $1,140 in premiums per year; for someone smoking a pack a day, the lowest price more than doubled to $2,571 per year.

The difference in health insurance isn't as dramatic. According to eHealthInsurance.com, the monthly premium for a policy from Regence Blue Shield with a $1,500 deductible for a 44-year-old male nonsmoker is $292. The same policy for a smoker is $338 per month, or $552 more a year.

A few state governments also charge their employees extra for health insurance if they smoke, and others are gradually joining the trend.

According to the ACLU, a majority of states do not have a state law preventing employers from discriminating against potential and current employees based on nonwork activities. Thirty-one states do have laws that protect smokers, including Colorado and North Dakota, which ban discrimination based on any form of legal, off-duty behavior.

When shopping for homeowners insurance, nonsmokers can generally expect to receive a minimum 10% discount. The insurer's point of view: Smokers burn down houses.

The most common homeowners insurance policies range from approximately $457 to $1,372 per year, depending on the home's location. With the discount, a nonsmoker would realize savings of at least $45, but most likely more.

Few people set out to cut their life short, but smokers greatly increase their chances of dying sooner than nonsmokers. In his book "The Price of Smoking," Frank Sloan, the director of the Center for Health Policy, Law and Management at Duke University in Durham, N.C., details the financial impact of a shorter life span on retirement benefits.

"Smokers, due to higher mortality rates, obtained lower lifetime benefits compared to never smokers, even after accounting for their smoking-related lower lifetime contributions," the research says.

Sloan and his colleagues found that the effects of smoking on lifetime Social Security benefits were $1,519 for 24-year-old female smokers and $6,549 for 24-year-old male smokers. This is money paid into Social Security but never collected, because the beneficiary died prematurely of a smoking-related illness.

"You could be paying into Social Security year after year, and if you die at 66 because you're a smoker, it's money down the drain," says Sloan.

Keeping up appearances

Numerous studies find that smokers earn anywhere from 4% to 11% less than nonsmokers. It's not just a loss of productivity to smoke breaks and poorer health that takes a financial toll, researchers theorize; smokers are perceived to be less attractive and successful as well.

Bad breath, yellow teeth and smelly clothes are just a few of the personal side effects of smoking, and all cost money to correct.

An extra pack of mints or gum a week adds up to about $50 per year. Need your teeth whitened once a year? Brite Smile, which has offices across the country, sells its service for $400 to $600. Most professional-grade teeth whitening products retail for a minimum of $200.

Dry-cleaning bills are likely to be higher also. Clean that suit one extra time a month at a cost of $12, and there goes an additional $144 every year.

Updated Sept. 3, 2008

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