Will you pay more for life insurance if you're overweight?
Statistics collated in the Australian Health Survey for 2011-12 using the body mass index (BMI) found that 63.4% of Australians over the age of 18 were overweight or obese. With the increase of obesity rates in recent years (56.3% in 1995) it's little wonder that underwriters are using BMI as indication of peoples health. Similarly to an insurance underwriters assessment of smoking or alcohol intake, obesity is used as measure of ones risk that they present to an insurer through an increased risk of mortality. An insurer will consider someones BMI along with any other health conditions that may be present when assessing applicants.
Some known health conditions that have been linked to obesity include:
- High blood pressure
- Heart disease
It is important to note that it would be rare for an insurance underwriter to reject someones application based solely on their BMI. A person who is medically obese can still generally find cover with most mainstream insurance providers. However, an insurer will usually request that the applicant submit additional medical underwriting to assess if there are any other conditions present. For example, an underwriter may request further information around the persons health if it is found that they have a BMI of over 30 and also have high cholesterol.
How does BMI affect life insurance premiums?
Insurance companies provide life cover to people who are in general good health. They cover you for uncertainties in life and not for events that are likely to occur. Therefore, if you have a low BMI and you are of ideal weight, the insurance companies consider you in good health with a reduced mortality level which will be reflected in lower premiums. However, if your BMI is high and you fall into the obese category, this is taken as an indicator that you could die early as a result of medical complications. If the person is found to suffer from other medical complications as a result of their weight a premium loading may be applied.
Finding life insurance for people that are overweight
People should not be deterred from taking out life insurance solely because they are overweight. As stated previously, it would be extremely rare for an underwriter to reject a policy application solely on someones BMI, or whether they are medically obese. Insurers will consider medical evidence other than BMI in their assessment including:
- Statement from a certified medical practitioner
- Copy of medical history
- Copies of recent medical checkups
An underwriter will look to assess how controlled the condition is and what treatment has been specified.
Reduced costs after losing weight
If you take out a policy when classified as unhealthily obese or overweight, you will often be able to take another medical assessment later. If you have lost weight or otherwise become healthier before taking another medical test, your premiums may reduce in line with the health gains. For example, your premiums might go down because your BMI is lower, as well as because your blood cholesterol is within a healthier range.
In addition to this, some insurers will promote healthy living programs that offer direct discounts for taking steps to manage your health. These discounts may be applied on top of the cost reductions associated with "scoring better" in your medical test.
For example, here are two insurers' programs:
|The program||Program benefits||Rewards|
|Asteron Life Plus Health Rewards|
Programs such as these can make health gains a lot easier to achieve. Far from ruling out overweight people, some insurers are specifically looking at getting them on board.
However, not all insurers offer such programs, and not all will offer the same level of cover or accept all applications. It can be worth shopping around until you find one that does offer cover, and programs that work for you. Applicants can save thousands by taking the time to compare different options, by seeking advice where needed and by going through healthy living programs that offer direct rewards, as well as the benefits of being able to retake a medical assessment later for new, lower premiums.
Body mass index as an indicator of health
BMI is found by combining height, weight and body dimensions. The formula that is used to calculate a person’s BMI has been developed in such a manner that it provides a generally accurate assessment of a person’s total body fat. A specific "healthy" BMI range has been calculated by experts and depending on where your BMI falls within this range, you may be classified as being underweight, of ideal weight, overweight, obese, or severely obese. For example, if your BMI is below 18.5, you are considered to be underweight. On the other hand, if your BMI is between 25 and 29.9, you are overweight and a BMI of over 30 will categorise you as obese.
The challenge that faces underwriters is that people with quite dense muscle weight that are still quite fit (i.e. athletes) may have quite a high BMI but do not present a significant risk to underwriters. This is where additional underwriting including statements from certified medical practitioners could be used to show that that the persons weight is not a health risk. Blood cholesterol, blood pressure and many other health factors are also considered, and can also impact your premiums and odds of getting cover just as much as BMI, or even more.