In a 2017 article Sanlam Personal Finance spelt it out in hard numbers – a healthy, non-smoking 25-year-old man could qualify for R2m cover at a monthly premium of R294.
The same cover would cost a smoker R592 per month – more than double. A healthy non-smoking woman of 45 would pay about R462 for the same cover, but she’d have to pay R1,090 a month if she smoked.
When Richard Kille took out a life insurance policy some years ago, he declared that he was a smoker, and has been paying a relatively high premium as a result.
So when he gave up smoking in July, he was looking forward to a premium adjustment. But insurers require a blood test to check nicotine levels. “So because I use nicotine gum, I’ll test positive for nicotine, and that means they won’t change my status to non-smoker,” he said.
Kille made the point that the policy descriptions are “smoker” and “non-smoker”, not “nicotine user” and “non-nicotine user”.
“I possibly still have a nicotine addiction, but the positive effect on my health by not smoking cigarettes as a nicotine delivery method far outweighs my use of nicotine gum,” he said.
“Nicotine is not what causes serious illness and death from cancer, lung, and heart disease – those culprits are the tar and toxic gases that are released from burning tobacco when you smoke. Is it true that my insurer can still consider me to be a smoker, because I have nicotine in my blood?”
The answer is worth R1,116 a month to Kille.
In researching the issue, I found an article in the USPolicyGenius, which states: “Even though smoking cessation products ostensibly help you quit smoking, they still fall under the category of tobacco use.
“Some insurers are more lenient than others, so when you’re deciding on which insurer is best for you, consider how they consider non-cigarette nicotine products."
My quest for local industry input on the issue led me to the Medical Underwriting Standing Committee of the Association for Savings and Investment South Africa (Asisa).
“Is it standard practice in the industry to only regard an insured as a non-smoker if they have a zero nicotine intake?” I asked. “No vaping, no nicotine gum chewing? Is the intake of nicotine in itself considered hazardous to health?”
Dr Maritha van der Walt, convener of that Asisa standing committee, said as long as a person is still dependent on nicotine – as Kille admits to being – there was “a very high possibility” of them relapsing back to smoking.
“Since Mr Kille is using products containing nicotine, it is impossible for life insurers to determine whether he has indeed stopped smoking, as both cigarette smoking and nicotine replacement products result in a positive nicotine test,” she said. “He can approach different insurers and possibly get adifferent decision.”
So it seems that when it comes to “cessation strategies”, for many insurers, only those that don’t involve keeping nicotine in your bloodstream will result in a premium plummet.
Why does a new geyser get a second-hand warranty?
I’ve had a flurry of queries about geyser warranties lately.
Nirdosh Kassie wrote: “Chatting to my plumber, he mentioned that a geyser comes with a five-year warranty, but if the geyser packs up in four years and 11 months and gets replaced with a new geyser, that replacement geyser inherits the balance of the original geyser’s warranty, which means it only has a one-month warranty.
“But surely a brand new geyser should be covered by a new five-year warranty?” he asked. “If that new geyser gives trouble after a few months, why should the consumer have to pay to get it repaired or replaced?”
It’s a question I get about all sorts of products replaced under warranty, but mostly geysers. It is indeed true a replacement product gets the balance of the warranty remaining on the product it replaced.
This is how former Consumer Goods & Services Ombudsman Neville Melville explained it to me a few years ago: “All a warranty is, is a term to a contract – in this case, that the geyser would work for five years, failing which the company would fix or replace it. So the consumer gets what they expected and paid for – the use of a geyser for at least five years.
“If this were not the case, it would potentially be a situation – as one retailer put it to us – that they were compelled to provide shoes for a child throughout his school career because each pair developed a defect just as it neared the end of its warranty period.”
Put like that, the policy makes sense...