As you grow older and start a family, purchasing life insurance is one of the most important steps you will take to secure the financial wellbeing of your loved ones. Life insurance protects your beneficiaries when you die by providing a death benefit that could cover anything from funeral expenses and outstanding debt to everyday life expenses and future tuition costs.
Your weight can have a significant impact on your risk factor which can be the difference between a lower or higher insurance premium. Here is a brief overview on how losing weight changes your life insurance.
How health and weight influence life insurance premiums
The premium for your life insurance can be determined based on your age, gender, profession, and most importantly, your health. Life insurance companies consider individuals with certain health conditions to be at a higher risk than individuals who are healthy. From the insurance company’s standpoint, they want to charge you enough that they do not lose money from paying out a death benefit, especially in the case of a term policy where they are betting that you will outlive the term. Therefore, a young and healthy individual has fewer risk factors and a lower mortality rate.
Life insurance companies use build charts to determine the ratio between your height and weight which are then compared against mortality rates within your build type to determine your risk rating. If your weight is under or over the preferred ratio, you will likely be considered a riskier applicant and will therefore pay higher premiums and in some cases, be denied coverage altogether.
Obese individuals are at an increased risk for serious health complications including hypertension, type 2 diabetes, stroke, heart disease, cancer and mental illness. Being underweight also comes with its own health risks like anemia, osteoporosis and decreased immune function. These health conditions can lower your life expectancy and will appear as risk factors to life insurance underwriters.
Weight loss and saving money
Life insurance is a great investment for your future no matter your body type. If you are in the market for life insurance coverage but you are currently overweight or obese, you might think that it is a good idea to lose some weight before you apply for coverage. However, just because you have lost weight does not necessarily mean you will have a lower premium because other factors, like your age or conditions arising from your obesity, may still influence your risk rating.
While it is true that a healthy weight may generate a lower premium, if you do not lose the weight right away, it is likely that you will put off purchasing a policy. This delay means your loved ones will continue to go without coverage. When it comes to overweight life insurance, waiting too long can easily turn into being too late. Instead, consider purchasing a renewable term policy in which the policy renews annually, or searching for a policy that allows you to apply for a re-rating in the future.
Life insurance premiums after weight loss
Over the course of a life insurance policy, many of your risk factors may change. While tobacco use and health condition improvements are two common updates, significant weight loss may also impact your life insurance premiums.
Before purchasing a policy, discuss the potential for future re-evaluations or ratings if you think a life change like weight loss may apply to you. While every insurance company will have a different policy on the re-evaluation process, most life insurance companies will need to see significant and healthy weight loss that is being maintained before they will lower your premium.
The reapplication process will consist of a new medical exam and an evaluation of your medical records. Be sure that your records show that you have not only lost significant weight but have been able to keep it off. To qualify for a re-rating, consider the build chart in which you were first evaluated. If you have only lost 15 pounds, most insurance companies will not feel that your risk factor has changed. However, if you have gone from clinically obese to a medically healthy weight, your weight-to-height ratio may change enough to lower your risk rating and in turn, lower your premium. Keep in mind that losing weight due to an illness may not qualify you for a better health rating.
How to get lower premiums after weight loss
To get a lower premium on your weight loss insurance, the first step is to contact your life insurance agent and ask how to apply for a re-rating or re-evaluation. You will then need to be prepared to undergo a new medical exam and provide recent medical records from your primary physician.
In other words, be prepared to back up your claim with valid evidence to increase your chances of being reconsidered. If your insurance company will not let you apply for a re-rating, it may be time to apply for a new policy at a different company where you will get a fresh medical rating.
Frequently asked questions
How does a build chart compare to your BMI?
Your BMI, or body mass index, is a standard unit of measurement to determine obesity. BMI is calculated by taking your body mass in kilograms and dividing it by your height in meters squared. On the other hand, a build chart, or build table, is a measurement tool used by a life insurance company to determine the maximum weight by height to determine a rating class for your health risk.
Each company uses its own specifications in its build charts to determine your risk rating. However, if you have a high BMI and are considered clinically overweight or obese, it is likely that will correlate into a higher risk rating through a life insurance company. Before you apply for weight loss insurance coverage, you can ask an insurance company to provide you with their standard build chart.
Can you be denied life insurance coverage if you are overweight?
Yes, a life insurance company may deny you coverage if you are overweight. However, because every life insurance company will have its own rules regarding weight limits, it is possible to find another insurance company that will insure you even though another company has denied coverage. Although it varies, a company will usually only deny coverage if you are considered morbidly obese. In some cases, a company may instead only offer a specific type of policy or coverage limit and you can expect to pay higher premiums than an insured individual who is not overweight.