Obesity & Its Perceived Affects on Term Life Insurance

Insurance companies generally use the BMI (Body Mass Index) combined with waist circumference measurement to determine if you are overweight or obese at the time of application. This helps build your risk profile which is important because the associated health risks of being overweight could potentially lead to a future claim. Being overweight is known to contribute to health problems such as cardiovascular disease (for example high cholesterol, hypertension, heart attack or stroke), certain types of cancers, type 2 diabetes, sleep apnoea and musculo-skeletal problems due to increased pressure on joints.

An insurer will sometimes place a loading (additional premium) or exclusion on your policy if an elevated probability of future claim is perceived. A loading is a favourable outcome because although you pay a slightly higher premium it means you are fully covered. In some instances certain insurances may be declined, depending on the overall risk.

Sometimes, a blood test and/or medical examination might be requested at the application stage which will provide the underwriter with more insight into your overall health. This will be paid for in full by the insurance company and we can usually arrange for a mobile paramedic to visit you at home or work to perform the tests at a time that suits you. This minimizes any inconvenience and most people think of this as simply a “free” general health check-up. The results can also be provided to your usual GP to keep with your medical record.

The best thing about underwriting up-front is that the insurance company assesses the risk of insuring you based on your health at the time of application. If you are accepted, the cover is guaranteed to be renewable until expiry. This means that the insurance company cannot cancel your policy or change the terms of acceptance in future, even if your health deteriorates. Let’s say for example you are offered standard rates now, but develop heart disease down the track, your policy will always be standard rates. Or if you are offered a 50% loading now and put on more weight in future, the loading will always remain at 50% despite the increased risk. However if you are offered a 50% loading now but you manage to lose weight and maintain a healthy BMI in future, you may be reconsidered for standard rates down the track.

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