How Being Overweight Can Affect Your Life Insurance Premiums

Difference between overweight and obesity

How Being Overweight Can Affect Your Life Insurance Premiums

Published: February 20, 2018

If you or a loved one is overweight or obese, you can get life insurance. However, obesity is one of the most difficult challenges to overcome when trying to find affordable life cover.

Life insurance companies base your premium rate on your life expectancy. Coronary heart disease is the leading cause of death in Australia, followed by dementia, and stroke (Australian Institute of Health and Welfare, 2017). Obese men and women have higher risks of developing these diseases, as well as specific cancers, type 2 diabetes and kidney disease.

Whether or not you’ll pay higher premiums as a result of being overweight depends on a number of factors, including your age, gender, the cover amount you’ve chosen and the insurer.

Can an obese person get life insurance?

Yes, an obese person can generally get life insurance. However, you might have to pay more for your policy than a person within a normal weight range. This is because the life insurance industry views this as a serious health condition. If you are categorised as obese, you are seen as a higher risk individual who might be more likely to claim in future.

How does weight affect life insurance rates?

The life insurance industry typically uses body mass index (BMI) to assess an applicant’s risk of developing obesity-related diseases. Your insurer may consider you to be obese when you have a BMI of 30 and above, or if your body weight is 20% or more than the ideal weight based on your height, age, gender and build. Because of the negative consequences associated with obesity, many life insurance companies will charge higher rates compared to customers that are of a healthy weight range.

Other factors that might affect the price of your premiums include:

It’s important to note that each insurer has their own underwriting guidelines, so it might be worth comparing a variety of quotes from Australia’s leading life insurance companies.

What is a healthy weight for life insurance?

Body mass index is used to broadly define different weight categories in adults 20 years and older. Life insurance companies generally determine a healthy weight range to be between 18.5 and 24.9 BMI as defined by values derived from population averages, groups of insured persons, and from mortality rates found by statistical data. You can calculate your BMI by dividing your weight in kilograms by your height in metres and then dividing the total by your height.

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Life insurance rates and BMI

BMI is one of the more common tools used by life insurance companies to assess your general health and risk of possibly claiming due to a health-related illness. This is a key part of the underwriting process and helps insurers calculate your premium price.

Life insurance BMI chart

  • 15.9 and under is severely underweight
  • 18.5 is underweight
  • 18.5 to 24.9 is classified as an average weight
  • 25 to 29.9 is deemed overweight
  • 30 to 30.9 is defined as obese
  • 40 and over is morbidly obese

While BMI is a general indicator of your overall body fat, it’s important to note that other factors do play a role, such as your muscle mass and physical build.

Life insurance bmi chart

Shortcomings of BMI for life insurance

The disadvantages of using only BMI include:

  • Overestimating body fat in muscular and lean individuals, but also possibly
  • Underestimating body fat content in overweight and obese individuals.
Difference between overweight & obesity

Muscle weighs more than fat, but this isn’t part of the standard BMI calculation. If you have more than average lean muscle mass, your BMI may provide an inaccurate indication of your body composition. For example, a crossfitter with higher muscle tone might register as overweight according to BMI, even though they are not.

On the other hand, if a person has osteoporosis and thus lower bone density, their BMI would be low, even though their body fat might be high.

Measuring your body fat percentage is usually a better way to determine your health risks

If you are a person that regularly does weight training, CrossFit or other exercises that build lean muscle and you want to make sure your BMI does not negatively impact your life insurance premiums; then it might be worth measuring your waist-hip ratio and body fat percentage:

BMI chart
  • Waist-hip ratio looks at the ratio of our waist circumference to hip circumference. A higher proportion of fat around your waist has been linked to increased risk of cardiovascular problems. According to The Australian Government’s Institute of Health and Welfare (2017), a waist circumference of 102cm or more in men and 88 cm or more in women substantially increases their risk of metabolic complications.
  • The skinfold measurement test (Caliper measurement) measures the thickness of your skin at specific points on your body. This test needs to be done by a registered nurse or doctor because the accuracy of skinfold analysis largely depends on the expertise of the medical professional doing the analysis.

Providing these more definitive body fat measurements when applying for life cover might save you a lot of money.

What’s the difference between overweight and obesity?

Essentially, the difference between being overweight and obese in regards to life insurance is determined by your BMI.

Overweight vs obese: The key differences insurers’ generally take into consideration

Overweight Obese
BMI of between 25 and 29.9 BMI of 30 and higher
Your weight is considered higher than normal compared to the overall population average of people of your height and bone density. Obesity is a medical condition in which excess body fat accumulates to the extent that it may have a profound negative impact on your health.
Risk of health problems start to increase when only slightly overweight, and problems become more likely the more overweight you become. You’re at higher risk of type 2 diabetes, high blood pressure (hypertension), coronary heart disease, stroke, and mental illnesses such as clinical depression all of which lead to a reduced life expectancy.
Depending on how overweight you are and the insurer you choose you might be offered standard premium rates or raised rates. Increased mortality rates could lead to a higher premium payment or even your life policy being declined.
Overweight people can generally lose excess body fat by reducing their caloric intake and regularly exercising. Obese people can also benefit from a combination of healthy diet and regular exercise. However, in some severe cases, gastrointestinal surgery might be necessary.

Obesity statistics in Australia

According to the General Practice Health of the Nation (September 2017), doctors have found that obesity and complications from obesity to be one of the main health problems Australians face today.

A report from the Australian Institute of Health and Welfare reveals that nearly two-thirds of Australian adults are overweight or obese and one-quarter of children and adolescents.

Currently, we are one of the fattest nations in the world. These rates have more than doubled in the last 30 years, and by 2025, an estimated 70% of our population will be categorised as obese or overweight.

How does weight affect life insurance rates

Why are obesity rates rising?

Many features of our modern lifestyles have contributed to today’s ‘obesogenic’ environment. We are encouraged to indulge in ‘cheat meals’, exercise fads, and crash diets. We watch television and play video games instead of being physically active. We sleep less, work longer hours and stress more.

10 leading causes of rising obesity in Australia

  1. More processed and energy-dense foods that are cheap, easily available and last longer.
  2. Aggressive marketing of food products and increased portion sizes.
  3. Junk foods can become severely addictive because of the powerful stimulation of the rewards centres in our brains when consuming them.
  4. Our Western diet can cause insulin resistance in many individuals, where energy gets selectively stored as fat.
  5. Increased reliance and use of technology leading to a decrease in physical inactivity.
  6. Higher levels of chronic stress and depression resulting in many to comfort eat and overeat.
  7. Certain medication to help alleviate mental health problems can cause weight gain as a side effect.
  8. Genetic factors. Children of obese parents are much more likely to become obese.
  9. Misinformation about health and nutrition being spewed by “health gurus” and big corporations profiting from their low-fat, carb-free products.
  10. Lack of sleep tends to disrupt the hormones that control hunger and appetite, which could contribute to your late night snacking.

Health consequences of being overweight

According to the 2017 report from the Australian Institute of Health and Welfare, if you are overweight or obese, you have an increased likelihood of developing many chronic conditions, such as cancer, cardiovascular disease, back pain, chronic kidney disease, asthma, dementia, diabetes, and gout.

Prevalence of chronic conditions between normal weight vs overweight and obesity

Source: Australian Institute of Health and Welfare

Weight loss surgery and life insurance

There is always a risk when undergoing surgery. Weight loss surgeries might be viewed as elective surgery and thus generally not covered by most life insurance policies.

You need to confirm whether your life and/or TPD policy covers death and disability due to a complication of elective weight loss surgery. Read your Policy Disclosure Statement (PDS) to confirm.

Best life insurance companies for overweight people in Australia

Like it or not, your weight is a major factor in finding affordable life insurance. An overweight person will pay more than a person at a healthy weight, and an obese person will have higher premiums than an overweight person.

While you’re on your journey to achieving a healthy weight, you can still get life insurance at cheaper rates when comparing quotes from a variety of companies and choose the one that matches your budget, while providing you with the level of cover you require.

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Obesity and health insurance premiums

The World Obesity Federation (WOF) estimates that it will cost Australia about $21 billion to treat obesity-related diseases by 2025.

The medical costs of treating these serious health consequences are placing the Australian economy under significant pressure, leading to an overall increase in health insurance premiums.

obesity and health insurance premiums

In general, being obese will not result in you paying higher health insurance premiums, because pre-existing conditions may not negatively impact a customer’s ability to purchase private health insurance.

In response to the strain on our health services from obesity and its related illnesses, medical experts are calling for ‘fat tax’. This tax is supposedly meant to help fight obesity and will result in obese Australians paying higher health and life insurance premiums.

However, if the government were to charge obese people higher rates, it might lead to these individuals cancelling their private health insurance and thus become a burden on the public health system.

For example, bariatric surgery, which reduces the size of the stomach and helps with weight loss, can cost between $2,800 and $18,000 depending on your private health insurer. That number increases to anything from $8,000 to $27,000 if you don’t have private health cover.

Not all weight loss surgeries are covered by private health insurance or Medicare. However, you can generally claim a rebate for bariatric surgery if you have a mid to top-tier private health insurance policy.

Take note; many health funds will have a waiting period you need to serve before claiming on procedures like a gastric sleeve and gastric band, as well as a gap that you would need to pay.

Review and compare what the top 10 private health funds have to offer you, before choosing one that fits your budget.

Best life insurance companies for overweight

How can I improve my weight management?

Everyone has a different reason for their current weight and will, therefore, embark on a different weight loss journey. However, it’s important that you consult a doctor who knows your medical history to assess what kind of approach will work best for you.

Don’t give up hope, every single step you take is a step towards a healthy body and a happy heart.

Weight loss resources:

  • Dieticians Association of Australia (DAA): The national association for dieticians with branches in every state and territory.
  • Nepean Family Obesity Service: You can telephone 4734 4533 or email [email protected]
  • The Butterfly Foundation: Supporting and representing the interests of those with eating disorders, including bulimia, anorexia, and overeating.
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