So you’re not in perfect health? It's not your fault.
There just aren’t enough hours in the day to achieve everything we need to.
We work so hard that we end up getting wound up and stressed out.
When we get home, late, there isn’t time to prepare a meal so we end up snacking on convenience/junk foods.
After eating crap, the last thing we want to do is exercise so we veg out on the sofa.
It’s no wonder that stress, diabetes and weight issues are so common in Ireland.
In the first of a series of articles I’ll examine how the life insurance companies price your life insurance if you have pre-existing health conditions.
Life insurance companies use your Body Mass Index (BMI) to price your life insurance policy.
Your BMI is a measure of body fat based on your weight in relation to your height.
You see, according to the insurers, your BMI is an accurate indicator of your overall health.
I know many studies have shown BMI is inaccurate and misleading but it’s what the insurers use so we’re stuck with it for now.
So if you’re 22 stone and five feet six inches tall you probably have a health glitch or two beyond your obesity or are in a higher risk category to contract an associated illness.
That’s because obesity complicates and causes other issues and chronic diseases, like diabetes.
For that reason, life insurance underwriters will increase your premium if you fall into the obese category.
How Common Are Obese Life Insurance Applicants in Ireland?
Ireland's obesity rate is among the world's worst with Irish men already having the highest body mass index in Europe.
According to a study in The Lancet, Ireland is set to become the most obese country in Europe within the next 10 years.
Among men, 38 per cent in Ireland will be obese.
Will Being Overweight Affect My Life Insurance Underwriting?
We hate to be the bearer of bad news but yes, being overweight will impact your life insurance underwriting.
Underwriting is where the insurer reviews your health details before offering cover.
In some cases, an insurer may reject or decline offering you life insurance.
Other insurers may ask you to attend for a nurse medical to get up to date readings and measurement before they make a decision.
How Do Life Insurance Providers Define Obesity & Being Overweight?
We’re asked this at least once per week so here goes:
While each company has different underwriting guidelines we’ve put together the most common classifications for Body Mass Index (BMI) below.
- Underweight: Being underweight can cause problems - see below.
- Healthy weight: You’ll get the normal price
- Overweight: You should get the normal price
- Obese: It depends on which insurer you apply to
- Morbidly obese: Cover possible but no chance if your BMI is over 50
How Does My BMI Affect The Price of My Life Insurance?
Ok, let’s say someone with a BMI of 25 pays the standard price for their cover.
Let’s assume he’s a 40 year old non-smoking male applying for €1m cover over 15 years.
The standard price for him is €75.06
If your BMI is over 30, the life insurance provider will offer you cover but will increase or load your premium by a certain percentage.
The percentage loadings the insurers apply are between +50% and +300%.
Let’s say your BMI is 34, you may get away with a + 50% loading so your final premium will be €112.59 per month (€75.06 + 50%).
But if your BMI is 40, your loading could be +150% so your final premium will be €187.65 (€75.06 + 150%).
As you can see, the higher your BMI, the higher your final premium.
Am I Too Fat To Buy Life Insurance?
Give it to me straight Nick!
If your BMI is under 50, and you have no other health issues, you should* be able to get cover.
But you need to be very careful about applying to the right life insurance company.
*Unless you’re a young male - young, overweight males have the highest rate of heart problems so the insurers underwrite such applications more strictly.
But I Play Rugby/Do Weights/Am Big-Boned. I’m Not Fat, I’m in Excellent Shape!
Some clients are big guys, usually current or ex-rugby players.
Take a 6’4, number 8 who weighs 20 stone. His BMI is around 35 so normally the insurer would increase his premium.
In such a case, the life insurance underwriters will review this case individually due to him having a muscular build and an active healthy lifestyle.
But this really is an outlier.
You almost have to be a professional athlete for the insurers to offer you the standard price if your BMI is over 35.
But I’m Tiny, A Skinny Minny, Can’t Put On Weight! (Should I Be Worried?)
Worried that being stick-thin could affect your life insurance?
It’s true—being too thin can also impact your life insurance rates as you’ll be considered under-weight.
You just can’t win can you!
But we’re not talking slightly underweight, we mean being below a healthy BMI. Again, use the Body Mass Index Calculator to check if your BMI is under 18.5
What If I’m Declined Because of My Weight?
Don’t worry, you still have options for obtaining life insurance.
Remember, not all life insurance companies are the same.
They have different rules when it comes to underwriting people with higher or lower than normal BMIs.
If one insurer has declined you, try another.
But it is best to apply to the most sympathetic insurer to begin with.
You see, if an insurer declines you, you’ll have to disclose that in all future applications.
Life insurance underwriters are cautious by nature, if one of their buddies in another life office has declined you, they might not be so keen to take on the risk their buddy has passed on.
Can I Go On a Crash Diet To Reduce My BMI?
You can but it might not help.
Insurers like to see gradual weight loss over 12 months so they can be sure your weight is stable before they can price it properly. You need to prove you can keep the weight off, not just lose it.
If you’ve lost weight quickly because of weight loss surgery, the insurers may take this into account but are likely to postpone offering you cover until some time after the surgery to see how your weight settles down.
There’s no quick-fix when it comes to saving money on life insurance when you’re overweight.
You need a long term plan.