If the dreadful pictures on cigarette packs can’t make you quit smoking, here’s a more alarming warning.
Smoking burns a bigger hole in your finances than you can possibly imagine. ET Wealth estimates that a 30-year-old who smokes five cigarettes a day would lose over `1 crore due to the habit by the time he is 60.
As the world gets ready to observe No-Tobacco Day on 31 May, we did some number crunching to find out the real cost a smoker pays. The biggest drain on the wallet is the price of cigarettes.Cigarettes are priced around `10-15, but we have assumed a price of `12 per stick.If a person smokes five cigarettes a day, he spends `60 daily–or `1,800 a month.
However, this is not a static cost.Cigarette prices have risen by an average 20% every year in the past four years, and will keep rising every year as taxes on tobacco products go up. We have assumed a more conservative rise of 8% in cigarette prices per year. Extrapolated over a period of 30 years, the smoker will spend `24.47 lakh on cigarettes. Now comes the interesting part. If the money spent on cigarettes was instead invested every month to earn 9% returns a year, it would grow to `69.23 lakh in 30 years.
The next big cost is the higher medical expenses that smokers incur due to poor health. You don’t need a medical expert to tell you that smoking leads to health problems. In its mildest form, smoking accentuates bronchial problems. But it can also lead to cancer and enhances the risk of heart attacks. We have assumed that a smoker will spend an average of `400 a month on medical expenses. Again, this cost will keep rising. Medical inflation is very high compared to consumer inflation. Prices of drugs, doctor’s consultation charges and diagnostic charges are rising at nearly 15%. Assuming a 12% rise in these costs per year, a smoker will spend `11.59 lakh over a 30-year period. If this money was invested to earn 9% returns, it would grow to `26.70 lakh in 30 years.
Smoking also means higher life insurance costs. Insurance companies know that smokers are a high-risk category . The extent of the loading depends on the person’s age, overall health and how many cigarettes he smokes in a day .We checked the HDFC Life online term plan rates and found that a 30-year old smoker would have to pay `460 higher premium every month for a cover of `1 crore for 30 years. Mercifully, unlike other costs, this will not rise every year.But this additional amount would add up to `1.65 lakh, and if it was invested instead, would compound to `7.52 lakh in 30 years.
It’s impossible to hide the fact that you smoke when you buy life insurance.Even if you stop smoking for an extended period before the medical check-up, traces of nicotine remain in your bloodstream long enough and show up in the blood tests. Even if you hoodwink the insurer and are charged a lower premium meant for non-smokers, you are taking a big risk. If death occurs due to an illness caused by smoking, the claim filed by your nominee will be rejected.
Curiously , though there is irrefutable evidence that smoking leads to health problems, smokers are not charged a higher premium for health insurance. But some companies such as Cigna TTK Health Insurance offer discounts if a policyholder joins a wellness programme or resolves to curb smoking.
The biggest price that a smoker pays is the health of his family. Studies show that children who live with a smoker or are exposed to tobacco smoke inside the home are more likely to fall ill. Smokers also have shorter lives. One estimate says that every cigarette shortens a smoker’s life by about 12 minutes. Five cigarettes reduce your life by an hour.Smoke for 24 years, and you celebrate one birthday less. Poor health also curtails the quality of life, preventing smokers from undertaking physical activities.
Most smokers have tried to kick the habit at least once. There is a range of products to help smokers quit. Nicotine-based chewing gum releases nicotine into the bloodstream, effectively stemming the urge to smoke. It can cost `50 and can go up to `3,000. Nicotine patches, which can be placed on the skin to release nicotine into the bloodstream, costs around `600 a pack.
One can also opt for Ayurvedic formulas that cleanse the body of toxins and improve blood circulation or take bupropion hydrochloride tablets, which affect neurotransmitters in the brain and curb the urge to smoke. Another alternative is e-cigarettes, which cost anywhere between `500 and `800.