BMI and Life Insurance Rates: How Are They Connected?
Updated: Oct 10
What is BMI? According to the CDC, BMI is a persons weight in kilograms divided by the square of height in meters. In other words, its a type of measurement of body fat. While BMI doesnt measure body fat exactly, it can be used as a screening tool for weight categories, including underweight, normal, overweight, and obese. These categories act as general indicators for health issues that may be more likely to arise given your current grouping. The standard BMI chart is as follows (as per the CDC):
How to Calculate Your BMI BMI is calculated by the straightforward formula of kg/m2 that is, your weight in kilograms, divided by your height in meters squared (As you can see, the BMI formula was created using the metric system). But you dont need to do the actual math if youre curious to know what your BMI is, you can use this online BMI calculator.
Why Does BMI Affect Life Insurance Costs? In the health field, BMI is used as an indicator of potential health problems that might occur in the future given your weight category. Life insurance underwriters ask for your BMI for the same reason. They want to see what potential health issues are on the horizon so they use life insurance height & weight charts to determine your rates, which are ultimately related to your life expectancy (and why some people get much cheaper life insurance, such as runners or athletes).
How Underwriters Determine Life Insurance Rates Heres how life insurance rates work: When you apply for life insurance, you are asked to fill out a detailed application with questions about your health and medical history, and you must also undergo a medical exam (unless you choose no exam life insurance, in which case the exam is waived). Insurance companies need to know as much about your health as possible, specifically when it comes to term life insurance because the entire business model is based on people living and companies not having to pay out death benefits. Statistically, the healthier someone is, the less likely they are to die early. So when an insurer grants coverage to someone in great health, the statistical odds are in everyones favor: that person wont die early, and the insurer wont need to pay out the death benefit. This is true for term life insurance, which is valid for a certain amount of time. Whole life insurance has no expiration date and the death benefit is paid out in almost all cases.
Mortality Risks and Life Insurance Premiums A person in good health is statistically likely to live longer than someone whos not in good health, which means that this person poses less of a risk to the insurer (in terms of paying out the death benefit). Since the risk to the company is low, they are charged lower premiums. A person who has health issues, on the other hand, is penalized for them, and this comes in the form of higher monthly premiums. Of course, its not really penalization, but how insurance companies cover their risk. If a life insurance company offers coverage to people who have serious health problems, its taking on a big risk. The statistical likelihood that the insurer will need to pay out the death benefit is high. Therefore, they charge these customers higher premiums to cover their risk.
BMIs Impact on Life Insurance Rates So now were getting the idea of why BMI has such a large impact on life insurance rates. While you cant look at someones BMI and get an entire picture of their overall health, you can look at it and say, statistically, x and x health issues are on the horizon. Obese people, for example, are at heightened risk for heart disease, stroke, high blood pressure, diabetes, certain cancers, and more, according to WebMD. At the other extreme, Healthline indicates that underweight people are at heightened risk for malnutrition, osteoporosis, weakened immune systems, and more. Either extreme carry health risks that will impact the life insurance rates of these applicants. Other factors that affect life insurance rates include:
Type of life insurance policy
Length of policy (relevant for term life insurance only)
Family health history
Your own health history
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