Background: Net costs of smoking in a lifetime perspective and, hence, the economic interests in antismoking policies have been questioned. It has been proposed that the health-related costs of smoking are balanced by smaller expenditure due to shorter life expectancy. Method: A dynamic (life cycle) method taking differences in life expectancy into account. Main outcome measures were direct and indirect lifetime health costs for ever-smokers and never-smokers, and cost ratios (ever-smokers to never-smokers). The estimations were based on annual disease rates of use of the healthcare services, smoking relative risks, smoking prevalences, and costs. Results: Annual direct and indirect costs of ever-smokers were higher than for never-smokers in all age groups of both genders. The direct and indirect cost ratios were highest at age 45 for women, and at age 35 and 40 for men, respectively. Taking life expectancy differences into account, direct and indirect lifetime health costs for men aged 35, discounted by 5% per year were 66% and 83% higher in ever-smokers than in never-smokers. Corresponding results for women were 74% and 79%, respectively. The results are insensitive to a broad range of relative risk-estimates and discount rates including no discounting. Excess costs of ever-smokers disappear if the inclusion of smoking-related diseases is narrowed to that of previous studies. Conclusion: Smoking imposes costs to society even when taking life expectancy into consideration – both in direct and indirect costs.