In my previous post How you can achieve Financial Goals by small sacrifices? I wrote in detail about the ways by which how you can create better financial life. Continuation of that, I thought to concentrate on the smoking habit which is the salient killer of your financial life too.
Usually people consider what the actual price they pay for buying as the expense of their smoking habit. But nowadays when you look at any product you are buying, especially when it comes to insurance, smoking actual cost you more than what you spend on this habit.
To clear above point, let us take one example of term insurance where I considered age of a person 30 years old who is looking for Term Insurance of Rs.1 crore and tenure being 30 years. I am taking HDFC Click2Protect example for calculation purpose. Now if we consider the person as non smoker then his yearly premium will be Rs. 11,910 (including tax). If we compare the same data for smoker then the premium will rise to Ra.18, 090. Smoker to non smoker difference of premium per year will be Rs. 6,180. Over the period of 30 years means it will cost you Rs.1,85,400. Suppose you invested this yearly amount of Rs.6,180 in any secured product over 30 years and return on investment around 8%, then the accumulation will be shocking Rs.7,00,000. In the same way it also increases your health insurance premium too, as your probability of becoming ill is more than non smokers.
Now think what will be your saving if you are non smoker? You may save on your dental expenses, medication expenses or health care expense. Surprising is that, studies have also found that smokers earn less than nonsmokers (SOURCE). In future you may also lose some benefits of non smoking in the cases of Auto Insurance and Home Insurance as the risk will be higher than nonsmokers.
I found an interesting calculation called “Cost of Smoking Calculator” on HERE . When I put the data like per day smoking one Packs (Contains 20 cigarettes) with tenure will be 30 years and found that life will get reduced by 4 years 212 days. I am not authenticating their study, but you may find this effect easily.
Hence habit which costs your health and money is really called a habit? Think and decide. Because it is your life, your money, but the effect will be on your dependents.