What Length of Term Do I Need for My Life Insurance?
Question asked by Jeremy Keyes
I have two young children and want to get Life Insurance in place to ensure that they are financially secure should I die. Where I am quite overweight I am worried I may not be able to get cover, will this be the case?
As with any personal insurance your current health can have an impact on the life insurance terms a provider will offer. Being overweight is a factor the insurers do consider and they measure this by your BMI (Body Mass Index).
Your Body Mass Index is your weight (in kilograms) over your height squared (in centimeters) which is then categorised in bandings. The most commons are as follows:
Underweight = <18.5
Normal weight = 18.5–24.9
Overweight = 25–29.9
Obesity = BMI of 30 or greater
Insurers take your BMI seriously as being overweight or obese can pose a real risk to your cardiovascular system. Being overweight also increases the risk of other serious illnesses such as diabetes which can also reduce your life expectancy.
If you have other health conditions in addition to being overweight such as high cholesterol or high blood pressure then it can make it more difficult to obtain cover.
If this applies to you, it’s best speaking to a financial adviser such as ourselves who know the market and the insurers underwriting practices to ensure you obtain the most favourable terms.
Life Insurance providers very rarely exclude conditions, tending to either decline cover or put a loading on your monthly premium to account for the extra risk.
If your BMI is north of 30 but less than 33 you can expect to pay an extra 25% on top of the standard premium. For example if the standard premium was £10 per month you could expect to pay £12.50 per month.
If your BMI is above 33 many insurers are still able to offer terms however the higher your BMI the larger the increase in your monthly premium.
The single best way to reduce your Life Insurance premiums if you have a high BMI is by looking at ways you can reduce this. Most insurers are willing to review terms during the life of the policy if you can show you are in better shape than when you took out the policy.
If your weight is due to your lifestyle then by making proactive changes to eat healthier, exercise and stop smoking can all help to reduce your BMI and in turn reduce your Life Insurance premiums.
Many people choose to take out Critical Illness Insurance at the same time they set up their life cover.
However, where the risk of a claim occurring is far higher for a serious illness if you’re overweight, the providers tend to be more strict when it comes to offering terms and the premiums tend to escalate quite quickly.