Bad breath, yellow skin, and increased risk for stroke, osteoporosis, and cancer. And the financial costs of smoking are pretty ugly, too.

The Centers for Disease Control estimate that cigarette smoking costs Americans more than $167 billion annually. With a pack of cigarettes costing an average of $4.54, a pack a day will set you back nearly $1,700 a year -- enough to buy a nice flat-panel HDTV, a leather couch, or even make a sizable contribution to your IRA. Putting that $1,700 in the market each year could easily amount to more than $200,000 in 30 years' time.

Because of the dangers and costs of smoking, I've avoided tobacco use of any kind -- save an occasional catch-up-with-an-old-friend cigar or cigarette. As stupid as that might be, I didn't think using one tobacco product a year could hurt.

Think again, stupid
My wife and I recently purchased term life insurance. We're young and in good health, so we figured we'd go ahead and lock in low rates now ... or so we thought.

As anyone who's ever applied for life insurance knows, you need a health examination before the insurance company can determine your monthly premiums. We were pretty confident going into the exam (my wife's a marathoner, I'm fairly active) that we'd secure at least "preferred health" rates.

We got "preferred" all right -- I got "preferred tobacco," and we were hit with $120 more in monthly premiums than we'd expected. So much for trying to lock in good rates while I'm young and healthy.

How it happened
When the examiner asked me whether I'd smoked cigarettes in the past year, I had a bit of an "angel versus devil on my shoulder" debate. I could answer with complete honesty and say I had one cigarette a few months ago at my bachelor party with some friends, or I could "bend the truth" and say I hadn't smoked.

But I figured that even if I fessed up to the one cigarette, that nicotine wouldn't show up in my blood test, and the insurance underwriter would see that I was tobacco-free.

So I decided to tell the truth. George Washington would have been proud.

Except that the mere mention of smoking a single cigarette in the past year made me just as much a smoker in the eyes of the insurance company as the pack-a-day Joe Camel living next door.

My insurance agent asked the underwriter how one cigarette qualifies someone as a full-fledged smoker, and he was told that this is an industry standard among life insurers such as Lincoln National (NYSE:LNC), Manulife (NYSE:MFC), and Metlife (NYSE:MET). Any mention of tobacco is a red flag to the insurer, since they see you as an increased risk for earlier death.  

And curse Sir Walter Raleigh
After the pure shock of finding out I'm a chainsmoker finally wore off, I decided to cancel my policy. I just couldn't justify paying an additional $120 a month for "preferred tobacco" rates, especially when I'm not a smoker in the first place.

But just for the sake of argument, let's say that I was a smoker, that I desperately needed life insurance, and that I had to fork over $173 a month in premiums, each month for the next 30 years. Over that period, I'd be shelling out a total of $62,280 to the insurance company. By comparison, a "preferred non-tobacco" person of the same age and coverage would pay around $50 a month, or just $18,000 over 30 years.

If the nonsmoker invested the extra $123 he or she saved in monthly premiums, the dollar figures would get even starker. Investing $123 a month for 30 years into a large-cap index fund like the Vanguard Total Stock Market ETF (AMEX:VTI) could reasonably result in $267,195, assuming 10% annual growth (the market's historical rate of return). And on top of strong, stable companies like Johnson & Johnson (NYSE:JNJ), that index fund would even include some insurance companies, such as AIG (NYSE:AIG).

An extra $267,195 would go a long way in retirement.

Learn from a dummy
By not smoking, and therefore qualifying for better life-insurance rates, you could easily save $300,000 or more than your smoking brethren over the next 30 years. So if you were thinking about taking up smoking as a hobby, or just quitting your habit, hopefully my experience and these figures will help you make a better decision.

If you're looking for more money-saving tips, consider a free 30-day trial to Motley Fool Green Light, the Fool's personal finance service. The most recent issue of Green Light helped readers find ways to save $481 on everyday expenses.

Fool contributor Todd Wenning is proud of his wife for raising money for AIDS awareness in a marathon in Florence, Italy, this past fall. He does not own shares of any company mentioned. Johnson & Johnson is a Motley Fool Income Investor pick. The Fool's disclosure policy quit chewing sunflower seeds, cold turkey.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.