Around 7% of people have admitted to being “economical” with the truth about their smoking and drinking habits in the hopes of securing cheaper life insurance, a new study has found.
Surveying 1,000 adults nationwide, findings from Peopl Insurance reveal that while applicants are mostly trustful when looking for insurance, others have not been completely upfront.
“There is definitely a cohort of people who knowingly do not declare, or underestimate, their smoking and/or drink levels to get cheaper cover,” said chief executive of Peopl Insurance, Paul Walsh. “While not altogether surprising, it is ill-advised at best.”
“If you manage to get cheaper life cover by failing to disclose or to be fully upfront about your smoking or drinking habits, doing so could see you or your family lose out on a claim down the line.”
The CEO added that false declarations could lead to a cancellation of a policy and a rejection of claims, leaving families to lose out on valuable lump sums on the death of a loved one.
“An insurer can investigate any claim made and if it discovers for example that a policyholder was smoking while paying the lower premiums of a non-smoker, it can refuse the claim,” Mr Walsh added.
According to the findings, men were more likely than women to underestimate their smoking and drinking habits in search of a better quote, while more than four times as many women reported struggling to get cover.
Furthermore, those aged between 45 and 54 are most likely to be dishonest about their drinking and smoking with one in ten of this age cohort saying they had underdeclared their drinking or smoking habits. That compared to only 3% of those aged over 55 and 2% of those aged between 18 and 24.
In addition, the survey found that more than one in 20 people seeking life or serious illness coverage have struggled to get it due to a health issue, with 10% of women being affected in this way.
The study also found that twice as many working-class people said they have never looked to buy either life or serious illness compared to middle-class people.
“Some people never give life insurance a second thought – as evidenced by the fact that one in five people have never looked to get life or serious illness insurance. Ireland now has one of the highest excess mortality rates in the EU,” Mr Walsh concluded.
“In light of these figures, we believe more work needs to be done to educate people about the benefits of life insurance and the financial protection it affords people and their families.”
