Smarty error when composing new CiviMail message

A Smarty error occurs when you click Next after composing a new CiviMail message containing Smarty tags. Example message:

{if

{contact.contact_type}

eq 'Individual'}
Individual

{else}
Not Individual {/if}

The following error occurs:

user error: Smarty error: [in string:{if Individual eq 'Individual'} Individual {else}

Not Individual

{/if}

line 1]: syntax error: (secure mode) 'Individual' not allowed in if statement (Smarty_Compiler.class.php, line 1399) in /home/public_html/sites/all/modules/civicrm/packages/Smarty/Smarty.class.php on line 1093.