Overall CI rates have hit the roof, meaning smokers simply don't have the money to pay for them
Protection products are becoming unaffordable to many smokers, according to protection specialist LifeSearch.
In its latest bulletin, the broker revealed the number of smokers buying protection is lower than ever. UK sales of critical illness (CI) insurance in particular have fallen rapidly over the last three years.
However, although Life-Search's CI sales remained level over this period, policies bought by smokers only accounted for 13% of CI sales, compared with 17% in March 2003.
While the proportion of smokers in the UK has fallen over the past couple of years, from 28% in 1998/1999 to 25% in 2004/2005, the drop does not explain why so few smokers are buying protection.
Kevin Carr, head of protection strategy at LifeSearch, believes inflated CI premiums could explain why so few smokers buy cover.
"The cost has been around double for smokers for as long as I can remember, so it is not a case of smoker rates getting higher, but it has more to do with the fact that CI prices have increased, making the cover very expensive for people who smoke," he said.
The figures could also suggest smoking clients are not telling the truth when they apply for cover.
Peter Chadborn, principal of IFA firm CBK, denied that was true.
He said: "I do not think clients are lying about whether they smoke, but the reason so few smokers are buying protection comes down to cost. The cost of being a smoker goes up each year and it is harder and harder for people who smoke to find a cover that meets their needs without setting them back too much."
