Insurance underwriters consider being overweight a risk when giving out life insurance policies. The increasing popularity of a sedentary employment has made Canadian residents increasingly susceptible to becoming overweight. It has been medically proven that being overweight and obese increases health issues like high blood pressure, heart disease and diabetes, and in turn increase mortality rates. As a result, most insurance companies have started increasing the life insurance premiums paid by overweight individuals.
Insurance companies use guidelines like the Body Mass Index (BMI) which is a measure of body fat using an individual’s height and weight. They have a chart that that shows the correct weight for a person of a specific age, height and gender. The average person’s BMI is about 23. If you are found to weigh above your recommended weight you are likely to pay 50% more in premiums for your life insurance. Some obese people can potentially pay up to 200% more than those with healthy BMI indexes.
You can be a healthy overweight individual but still have a hard time getting a standard rate for a life insurance policy. It is an unfortunate truth that the heavier a person is, the more this person will pay. Insurance companies favour the more “ideal” applicant who is expected to have a healthy and long life. There is however the possibility to get rerated, just like it is for smokers who quit smoking. When you lose weight, contact your life insurance provider to be re-evaluated for a decrease in your premium payments.
There are insurance companies that specialize in insuring people with problems like being overweight. The compromise reached is that the insured person needs to live longer in order for the beneficiaries to get more out of the death benefits. This is called a “graded death benefit policy.” If you are overweight and die within the first year of your policy, your beneficiary will receive the premium amount plus 10% of the payout. If you die after two years, then the percentage of the payout increases to 25%. Other companies will put you on a more affordable policy that offers lower death benefits.
Contact your Toronto Life insurance advisor who can provide you with information regarding the different underwriting practices associated with being overweight. Jack Bendahan, licensed Toronto Life insurance advisor can sit down and explore your options as well as offer you customized quotes.
