The ‘This is Money’ website has this week been discussing the effect on life insurance premiums on certain lifestyle factors. While smoking has long been known to increase insurance costs, for obvious reasons, now obesity is coming under the same level of intense scrutiny.
Obesity is a huge health risk, linked with an increased chance of heart attack, cancer and diabetes. It is no surprise then that life, health and illness insurers are taking more interest in customers’ weight and setting premiums to reflect the greater medical risks associated with obesity.
In America, insurers routinely ask customers for their body mass index on application forms and British insurers are also turning to BMI as a key indicator. Women who take a size 18 dress are routinely hit with premium loadings, while for many men insurance alarm bells can start ringing once their waist hits 36 inches. In the worst cases, cover is declined altogether.
A BMI of 35 could see a 50 per cent increase in premiums while a BMI of 40 or more could see them double. Premiums last for the term of cover, so it is essential to get the right deal at the start.
According to the World Health Organisation, a healthy body weight is a BMI of between 18 and 25. It classes a BMI of 25 to 30 as overweight while more than 30 is obese. But BMI is not an exact science. There are several factors that will influence the numbers. These include ethnic origin and lifestyle. For example, sports enthusiasts with heavy muscle tissue can end up with a high BMI despite their good general fitness.
There is hope for those erroneously caught up by the broad strokes of the BMI test. Customers who shop around will usually cover her on standard terms, subject to a medical.
Insurers are even more sensitive to BMI for critical illness cover, which pays out a lump sum if you are diagnosed with a particular condition, or for income protection insurance that pays a regular monthly sum if you are too ill to work. Here, those with a BMI as low as 32 or 33 may be asked to go for a medical examination before they will be accepted for cover.
Insurers are particularly concerned about younger people who are overweight. There is more tolerance of ‘middle age spread’. Insurers will charge a 28-year-old with a BMI score of 34 an extra 50 per cent for life insurance, whereas a 48-year-old with the same BMI pays the standard rate for a person of their age.
Shopping for a life insurance policy can be a startlingly frank appraisal of your future health and wellbeing. Customers should look at a high BMI as a warning from the future. Taking steps to tackle the problem could bring down your life insurance premiums and help you lead a longer, happier life.
