An email I received recently from a colleague falls into the same category. After reading an EBN inBrief story about proposed government anti-smoking incentives, he wrote to ironically point out:
“My cousin from England receives a monthly enhanced “smoker’s” pension … a higher pension than a non-smoker. The actuaries in England figure that a person can be paid a higher pension since the person won’t be living as long — true actuarial mathematical logic! From time-to-time, they ask him to confirm that he’s still smoking. I’m sure that would go over just peachy here in the USA!”
I did some digging, and in fact, it’s true: Brits who smoke — as well as those who are overweight, have high blood pressure, high cholesterol and other health risks — receive anywhere from a 7%-16% higher annuity in retirement income than those with good health.
The reason is just as my colleague explained it: insurers are betting smokers will die sooner. In fact, according to a BBC article on the topic, married pensioners could see their overall annuity decrease if one spouse smokes and the other is in good health, thus encouraging couples to hook up then light up. And if you beat the odds by smoking and living to old age — ka-ching!
Un. Be. Lieveable.
This is definitely an area where I think the Brits have it backwards. What do you think? Share your thoughts in the comments.
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