How Does BMI Affect Your Term Insurance Premium?

Like Anuj, you should understand the impact of physical health on term insurance premiums. Anyone with major health issues might be required to pay a significantly higher premium. The logic is simple: someone with health issues is more prone to unexpected demise than someone living a healthy life.

Insurance companies often use BMI (Body Mass Index) to evaluate a prospective customer's physical health. If the results are poor, the customer might be asked to pay a relatively higher premium for similar coverage.

Before you choose a term insurance plan, it would be good to understand the concept (of BMI) and evaluate how it affects your personal financial planning.

What is BMI (Body Mass Index)?

BMI is a simple yet effective measure of physical health. It refers to an individual’s weight relative to height and aims to reflect health conditions. Advanced BMI calculators also consider an individual's age and gender, along with height and weight, to arrive at the BMI score.

Although BMI does not calculate the fat percentage of an individual, you can categorise someone as underweight, normal weight, overweight, or obese based on the scores. A higher BMI refers to poor physical health.

How to Calculate BMI?

You can calculate BMI by using the following formula:

BMI = Weight (in Kg)/Height in metres^2

What is the Ideal BMI?

Determining the ‘ideal’ BMI can be difficult as two individuals are different based on their muscle mass, fat percentage, and genetic makeup. However, indicatively, a BMI chart looks like this:

• BMI between 18.5-24.9 is Normal
• BMI between 25 and 29.9 is Overweight
• BMI > 30 is Obese
• BMI < 18.5 is Underweight

Does BMI affect your Term Insurance Premium?

To mitigate such risk, the insurance company may demand a higher premium, especially compared with a similar individual having a normal BMI score.

What should you do if your BMI is on a higher side?

Like in Anuj’s case, if you have recently calculated your BMI and it is on the higher side, here are a few suggestions:

1. To reduce weight and become healthier, you must improve your lifestyle. For example, you can add exercise and walking to your daily routine. You must also consult a dietician to prepare a proper diet plan that helps you lose excess weight. Also, try to eliminate a sedentary lifestyle, a major cause of weight gain.
2. You should consult your insurance agent/company to discuss waivers. However, you must not postpone buying a term insurance plan, as the premiums would automatically increase with age.

You should also remember that BMI can be quite inaccurate in a few cases. It is quite popular but a generic tool. For example, if you have a decent amount of muscle mass and low body fat (6 feet with 95 kgs, with 12% body fat), your BMI scale can indicate you are overweight or obese. However, you maintain high strength and fitness levels. When choosing an insurance term plan, you can easily put these factors in your defence.

Summing up

There is no substitute for maintaining a healthy lifestyle. However, as we grow old, our professional responsibilities increase along with stress levels. Due to the nature of our work, it is quite difficult to reduce sitting time and control body weight. Insurance companies are well aware of the risks of unhealthy lifestyles and often resort to BMI scores to compute life insurance premiums.

A higher BMI can lead to expensive term insurance. You must take all possible steps to keep your BMI number in the ideal range. However, you must not delay the plan to buy term insurance, as beginning early is also the key in this case.

FAQs

Can a high BMI prevent me from getting term insurance?

A high BMI does not necessarily prevent you from getting coverage, but it may lead to higher premiums or stricter underwriting conditions.

Will lowering my BMI reduce my term insurance premium?

Improving your BMI through weight loss and healthier habits can lower your risk profile, which may result in reduced term insurance premiums.

Do insurance companies consider factors other than BMI?

Insurers often consider other health indicators, such as blood pressure, cholesterol levels, and smoking habits, in addition to BMI.

How quickly do insurers update premiums based on changes in BMI?

Premium adjustments are usually short-lived. Insurers typically reevaluate rates at policy renewal or after new health evidence is submitted.