People who are perceived to be unhealthy as a result of smoking or obesity are facing increased life insurance premiums as a result.

Consumers who smoke could pay over £2,000 more on their insurance policy than non-smokers according to price comparison website, Moneysupermarket.com .

And insurance companies are to introduce a ‘fat tax' for people who are overweight which could be as much as 50 per cent higher on new premiums, with the threshold at which the higher rate starts, set to be lowered.

Moneysupermarket.com revealed that a 35 year old man wanting cover of £100,000 over 25 years would be paying £17.68 a month with Scottish Provident if he was a smoker, where as if he was a non-smoker, he would only be paying £9.91 a month which equates to 44 per cent saving or £2,331 over the term.

Life insurance premiums can be as much as half the cost for people who don't smoke, with insurers not recognising someone as a non-smoker until after twelve months of giving up the habit.

Head of protection at Moneysupermarket.com , Lousie Cuming said, "In order to be classed as a non-smoker and qualify for life insurance premium savings, insurers insist smokers have kicked the habit for a full year. The difference in premiums between a smoker and a non-smoker is vast and there are significant additional savings to be made simply by shopping around for the best deal to suit your circumstances."

With the NHS Stop Smoking Service reporting an increase in the number of people quitting smoking since the introduction of the smoking ban in public areas on July 1^st 2007, Cuming went on to say, "Smokers often benefit from a higher income from pension payouts in retirement due to lower life expectancies. However, most people value the health and lifestyle benefits of quitting early and a significant slice off your life insurance premiums could simply be the icing on the cake."

Icing and cake however, should be avoided by anyone with a body mass index of 30 or more as this is the point at which insurance companies declare people as medically obese. According to Legal and General, 13 per cent of new applicants face paying higher premiums because they fall in to this bracket.

For a man aged 55 years old who is a healthy non-smoker with no weight problems, life insurance for £150,000 on a 25 year policy will cost around £1,000 a year. If he were classed as obese, the annual payment figure would increase by an extra £500.

Legal and General's director of underwriting claims, Russ Whitworth said, "Most people understand that poor diet and lack of exercise can lead to health problems but they might not realise that being significantly overweight would also make their life insurance more expensive. Although it is not an exact science, we find that body mass index (BMI) is the best indicator of the risk of being overweight, so it pays to stay in shape."

An Association of British Insurers spokesman said, "If you are obese, you are at greater risk of contracting certain diseases. It is just the same as increasing the premium for a smoker or somebody with previous medical conditions."

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